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Sunday, Jun 4, 2023

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In response to the strong demand for apartments in the San Fernando Valley, Kattell Properties is considering scaling down the commercial portion of its Warner Ridge project in favor of increasing the residential segment of the 21.5-acre Woodland Hills development. “Very preliminarily, we are exploring the possibility of adding more residential,” said Kattell Vice President Jim Smith. Kattell has not yet determined how many homes to add, but any such moves would cut into the 690,000 square feet of office space approved for the project. Smith said the company wanted to have a backup plan in its back pocket if for some reason the current strong market for office space in the Valley takes a dive. He also acknowledged that the company may choose to increase the number of luxury apartments slated for the development from the current 125 units, simply because there is strong demand in that market. Kattell applied for and received the Los Angeles City Council’s go-ahead to begin construction of the apartments before starting to build the office space. Company President Jerry Kattell said he wanted to expedite construction of the apartments to take advantage of a strong real estate market. In late January, Kattell Properties selected Dallas-based Lincoln Property Co. to develop the apartments and sold the 5.4-acre residential portion of the project to Lincoln. Smith said it sold the apartment project to another company because Kattell is primarily a commercial developer. If Kattell decides to turn some of the office portion of the project into residential, it may sell land to Lincoln or another developer. No decision on that has yet been made, Smith said. Lincoln is slated to break ground on the $18 million Mediterranean-style apartment complex in May, and Kattell hopes to be able to break ground on the office project some time in the fall. Lincoln buys into Westlake Lincoln Properties closed escrow in early March on a 131,000-square-foot, three-story office building in Westlake, the second Valley-area commercial property it has bought in the past year. The company bought the property at 2625 Townsgate Rd., adjacent to the Ventura (101) Freeway for in excess of $11 million, according to Tom Festa, an associate vice president with Grubb & Ellis Co. in Sherman Oaks. The seller was the Sade Trust. Boeing Co. will continue to occupy the entire building. The property’s structure-to-land ratio is low enough that it is possible to develop more office space on the land, said Bill Shubin, a Lincoln partner who is based out of the company’s Southern California headquarters in Irvine. However, there are as yet no entitlements for further development of the site, and the company would have to go through the usual application process to add on. Lincoln has taken a shine to the Conejo Valley area, seeing it as an attractive suburb for companies looking to relocate, Shubin said. Late last year, Lincoln bought the 165,000-square-foot Exxon Building in Thousand Oaks for $16.7 million, and Shubin said the company is actively looking to acquire further Conejo Valley properties. Another new Glendale office building MaguirePartners filed papers with the city of Glendale on March 12 stating its intention to start Phase II of its Glendale Center office property on Brand Boulevard at Glendale Boulevard. Pending Glendale’s design review of the project, the company expects to break ground on the 300,000-square-foot project by the end of 1998. The five to seven buildings in the project will constitute the first part of what will be a 1.1 million-square-foot office campus that the company has entitlements to build on 7.3 acres. Maguire spokeswoman Peggy Moretti said the company is in “serious negotiations” with a few entertainment-related companies for space at the development, whose buildings will be no taller than seven stories each. The project will be ready for occupancy about 18 months after ground is broken, Moretti said. Phase I of Glendale Center consisted of the revamping and earthquake retrofitting of a 14-story building at 611 N. Brand Blvd, completed in 1996 (Maguire co-owns that building with BankAmerica Corp., but owns the rest of the property outright). Phase III of the project will entail the development of another 800,000 square feet of low-rise office buildings adjacent to the Phase II campus to be built at an undetermined time. The company was granted entitlements for the development in May 1997. There are four other major office construction projects near Maguire’s in Glendale for a total of about 2.6 million square feet of space now under development. Warner Center filling up Warner Center’s Plaza III, a longtime albatross for owner A.H. Warner Center Properties, has done a lot of leasing in the past year. In January (the latest available figures), leases had been signed for 70 percent of the building a vast improvement considering that in January 1997, only 20 percent of the building was leased. The 600,000-square-foot tower at 21650 Oxnard Blvd in Woodland Hills was completed in 1991 and sat mostly empty. The strong leasing activity which a Warner official attributed to an overall improvement in the Valley’s real estate market served to tighten Warner Center’s overall vacancy rate by more than 10 percentage points between January 1997 and January 1998. Two months ago, 15.7 percent of the development’s 2.3 million square feet was vacant, as opposed to 28.8 percent in January 1997.

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