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Friday, Aug 12, 2022
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SHELLY GARCIA Staff Reporter Few people had heard of Daniel F. Selleck when he began exploring the possibility of developing a 33-acre site at the former General Motors factory in Panorama City into a retail shopping center. The president of Westlake Village-based Selleck Development Group Inc., a company he runs with his father Robert Sr. and brother Bob, had previously only been involved in small, community shopping centers with one or two stores. So when the large project began to grab community attention, many thought it was a third brother, the actor Tom Selleck, who was behind it. No one’s making that mistake now. Along with Voit Cos., which is handling the 600,000-square-foot industrial portion of the development, Selleck is helping to transform a community that had been marked by blight and crime since the GM plant closed in 1992, severing the area’s main economic artery. Even before it opened, “The Plant” was 98 percent leased, something Selleck says he’s never experienced with his other centers. The first retailer on the site, Party City, opened last month, and Babies R Us, Home Depot, Ross Dress for Less and Officemax and a 16-screen Mann Theatres will follow in the coming months. Selleck, who grew up in neighboring Van Nuys, remembers visiting the GM plant during a sixth-grade field trip. The parents and relatives of many of his friends were employed there. But it wasn’t merely nostalgia that brought him back. “My father has worked in the real estate business since 1948,” Selleck said, “and we felt that the area was still strong and had been somewhat overlooked by some of these retailers.” Question: The area that surrounds “The Plant” had become pretty desolate since the closing of the General Motors factory. Why did you think retailers would be interested in locating there? Answer: The key was the size of the parcel, the ability to bring in many retailers and not just one freestanding retailer. It’s very difficult to find a large developable site in the San Fernando Valley. There are a number of big-box tenants that had interest in this area of the Valley and the demographics we’re in the center of the population base in the Valley. There are a half million people within a five-mile radius. Yes, the area had been somewhat depressed over the years and, with the closing of the plant, the local economy was not strong, but typically real estate is cyclical and we go through these cycles and go out of these cycles. Nothing had really been done from a new development standpoint of any size in this area in the last 20 years, so we felt there was significant potential. Q: Did retailers share your optimism initially? A: I’d say it was a struggle at the start. Not only were we coming out of a difficult recession in Southern California, but it took some convincing on the area because it did have some higher crime. We felt that was because the area had a lack of investment and we could solve the security problem. Some tenants backed away because of the area, others saw the potential and stepped up. Babies R Us committed quickly, and I think they were instrumental in bringing in other tenants. Q: What were some of the projects you’d done prior to this? A: This is the largest project I’ve ever been involved with, but I did a 44-acre community center anchored by a Home Depot and Sam’s Club in Torrance. Most of the other projects we have done have been neighborhood or community shopping centers. We developed a couple of neighborhood centers in the San Fernando Valley and a couple of neighborhood centers in the Antelope Valley. Q: Do you think there are other opportunities like “The Plant” available in the Valley in today’s market? A: I think this (development) is going to make people look at this area. I think there’s some potential, but there are not an awful lot of sites like this that are available for future development. Q: At the same time, there seem to be other markets around the Valley where a large amount of retail development is continually taking place. In Woodland Hills, for example, there are four electronics stores within a few blocks of each other. Does all this development make sense? A: I think certain areas are becoming overbuilt, such as consumer electronics and large bookstores. In the retail business, we had five or six years that were very slow and we had some pent-up demand. But you have to be careful when things get better that you don’t do something stupid or feel that there is no end to the demand in the market. I see a number of submittals (project proposals) that I don’t react to, that I feel are marginal. But I think our economy is going to stay strong and I think there are opportunities in the area that are good opportunities. Q: How do you survive the cyclical nature of this business? Is there a way to manage the risk when you’re working so far in advance? A: I happen to have a very small company, so I don’t do a lot of deals. And I’m very hands-on for the deals I do. I will always be a small, entrepreneurial company doing maybe two to three deals a year, trying to understand the deals myself as opposed to having a staff person doing it. And even as difficult as it is to stay small during the boom times, you don’t take on every deal that comes across your desk. I have to be disciplined enough to say, ‘I’ve got enough on my plate, and I’m not going to do anymore,’ or I have to joint venture with somebody and spread the risk a little bit, and that’s worked out very well. Q: How did you get involved in this business? A: My dad was with Coldwell Banker. I certainly heard a lot about real estate at the dinner table and had an interest to learn more about it. In college I went to work for a developer over the summer leasing his vacant space in a shopping center. I did OK. It was interesting because they were the toughest spaces to lease, and I went and cold-called the neighbors and knocked on doors, but somehow or other I enjoyed it. Shortly after I graduated from college I went to work for Coldwell Banker Commercial, and was a broker for seven years. Then I went with a partner down in the South Bay and have been developing since 1984. Q: Did you ever think of doing anything else? A: I thought about going into banking, and I was probably going to have to go back to college and get my MBA, and I think having had that experience of dealing in the business world during my junior year and part of my senior year, I really enjoyed it and I didn’t want to go back to school for an MBA. Q: How do you think the current state of the financial markets is going to affect your industry? A: I’ve found that the last 30 to 45 days have been pretty volatile. A lot of the major institutions have pulled back from the commitments they made, but were not yet in writing. Lenders typically tie their interest rates to 10-year or 30-year treasury bills, and as those have dropped, the interest rates have gone down. I think lenders are reassessing their rates. I think that they’re trying to find equilibrium now, and the market may be somewhat volatile until that equilibrium is found. Q: How does that affect you? A: You always have to be aware of your exit strategy (the way you pay off a construction loan, either by converting it to a permanent loan or selling the property). I think we’ve seen a strong investment market for buyers, although the REITs (real estate investment trusts) have slowed down. And the financing market was very strong and that’s gotten a little more volatile, so we’re going to evaluate our alternatives. We still have some time. We don’t have a gun to our head. So we’re going to take a wait-and-see attitude, but certainly the volatility will have a bearing on what our ultimate exit strategy turns out to be.

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