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By BOB HOWARD A Santa Monica-based developer is hoping there will be enough demand from Hollywood studios and warehouse operators to fill more than 440,000 square feet of new industrial space to be built at a former Litton Industries site in Van Nuys. The Lewis Co. recently bought 16.2 acres of former Litton land at Strathern Street and Woodley Avenue for just over $7 million and has an option to buy an additional 4.6 acres at the site, according to Will Adams, an assistant director in the downtown L.A. office of Julien J. Studley who represented both Litton and Lewis in the sale. The 16-acre site used to house a number of Litton operations, including its engineering and defense systems manufacturing divisions as well as its credit union. Lewis Co. plans to raze the existing buildings and construct three industrial structures ranging from 110,000 square feet to 122,000 square feet each, according to Mike Clark, a broker in the Woodland Hills office of Cushman & Wakefield, which is handling leasing for the project. The three buildings represent the first phase of the project, which is slated to begin construction this month. The buildings are scheduled to be ready for occupancy in April. The second phase will involve construction of a single 90,000-square-foot building if Lewis chooses to exercise its option on the additional 4.6 acre parcel, Clark said. Demand from busy entertainment companies and general warehousing operations has driven down the vacancy rate for industrial space to about 6.5 percent in the San Fernando Valley, Clark said. And the vacancy rate is only about 2.5 percent for buildings of 100,000 square feet and above. Hollywood studios like the bigger buildings because they’re more suitable for sound stages, set-building and other activities that require high ceilings and plenty of floor space, according to Clark, while warehouse operators like them because merchandise can be stacked higher. Clark said the new buildings will have 32-foot ceilings and other features, like state-of-the-art fire sprinkler systems, that will make them among the most modern in the Valley. They’ll also have more parking to accommodate the Hollywood folks. General warehouse operations don’t usually require much parking, but the developer is including two spaces per 1,000 square feet in the project because studios typically require more workers than warehouses do, Clark explained. Clark said little new space has been built since the 1980s, partly because of the recession and partly because so little vacant land is left that developers must find sites like the former Litton property where they can demolish existing structures to clear the land. “The Valley is such a mature industrial market that the most modern buildings we have, for the most part, were built in the 1970s and 1980s,” Clark said. According to Mavin Dodge, vice president of operations for Lewis, the project is the only one Lewis now has under construction in Los Angeles County, but the company is in escrow on several other sites where it hopes to build industrial and office projects. A lesson in development In one of the most unusual recent real estate partnerships, a Santa Clarita school district has become a partner with Agoura Hills developer RussDar Corp. in an entertainment and shopping center to be built at a piece of school land on Soledad Canyon Road and Luther Drive in Santa Clarita. Rather than sell its parcel or lease it to the developers, Sulphur Springs Union School District has become a limited partner in Concept Centers L.P., which is building the 78,000-square-foot center. Construction on the project, called Solemint Junction, is slated to be finished later this year, according to Richard Darling, a principal of RussDar. Darling said his firm originally planned to lease the land from the school district and develop the center itself, which would have given the district “a modest rent for the ground lease” but no share of the center’s profits. The district and the developer decided the deal would be better for both if the school district would contribute the land as its investment in the partnership, he said. “They invested the land and we’re investing the cash,” said Darling, who said the development is one of a handful of deals in Southern California in which school districts have become partners with real estate developers. Among the others, he said, was a Doubletree Hotel at Fourth Street and the Santa Monica Freeway (Route 10) that he developed in the 1980s in partnership with the Santa Monica-Malibu Union School District. Such partnerships were popular throughout California for a while during the real estate boom of the 1980s, Darling said, “but they disappeared when the market crashed.” The Solemint Junction center will include a 10-plex movie theater, restaurants, a micro-brewery and a variety of other shops, according to Darling, who said the center is 80 percent pre-leased. Mortgage giant renews lease Fannie Mae, the Federal National Mortgage Association, has signed a 10-year, $15 million lease for 73,000 square feet of space at Plaza La Fuentes, an eight-story office building at Los Robles Avenue and Walnut Street in Pasadena, according to Jim Travers of Travers Realty Corp. Travers said Fannie Mae had one year remaining on its original 10-year lease at the site, which includes 165,000 square feet of space in the office tower and 16,000 square feet of retail space. Fannie Mae is one of the country’s largest buyers of home mortgages, which it buys from a variety of sources and resells to investors. School deal Moorpark Unified School District has bought a 61,000-square-foot industrial building on Maureen Avenue in Moorpark from the Coats Family Trust for $3.5 million, according to partner Sam Wagner of Woodland Hills-based TOLD Partners. Wagner said the school district will use the freestanding building for administration, business offices and warehousing of school district equipment. Health company consolidates Meridian Healthcare Management has leased 16,000 square feet of space on Califa Street near Variel Avenue in Warner Center for administrative offices being consolidated from three locations in Thousand Oaks, according to partner Brian Forster of TOLD Partners, who negotiated the six-year, $1.8 million lease for the company. Forster said the deal included six subleases by companies that will fill Meridian’s former space. Mall razing starts Demolition crews have begun razing the 135,000-square-foot former Robinsons-May Home Store in the Northridge Fashion Center at Tampa Avenue and Nordhoff Street as part of a previously reported plan to build a 10-screen, 2,800-seat theater complex there, according to an announcement by shopping center management. Construction of the 50,000-square-foot complex is scheduled to begin in October and be completed in the summer of 1998. Work at the mall includes an expansion at a second Robinsons-May store there which will be expanded to accommodate departments formerly housed in the Home Store.

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