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Saturday, Sep 23, 2023

Valley R.E. Column

The biggest news in the Valley last month was CareAmerica Health Plans’ decision to possibly not relocate to the West Hills Corporate Village office park after all. The health maintenance organization announced last summer that it would move its headquarters from Warner Center to the new office campus now under construction in West Hills. Then, one month later, San Francisco-based Blue Shield of California announced that it would acquire CareAmerica. The merger between the two companies closed in November, and now Blue Shield is assessing the combined company’s budget and space needs. Blue Shield last month notified the landlords of the West Hills project that it is “exploring the possibility” of subleasing the space CareAmerica had committed to. CareAmerica still operates under its own name as a wholly owned subsidiary of Blue Shield, but that is expected to change later this year. CareAmerica spokesman Ross Goldberg said CareAmerica might still relocate to the West Hills project if that proves to be the most financially feasible option. Nonetheless, Blue Shield remains responsible for the 10-year, 160,000-square-foot lease CareAmerica signed last year for $35 million. So if it decides not to relocate CareAmerica or other Blue Shield operations to the site, it would need to find a sublease tenant for the space. CareAmerica has occupied a 215,000-square-foot space in the west tower of the Trillium office building in Woodland Hills for the past three years. That lease expires in late summer. A number of tenants are looking at the space CareAmerica would have occupied at the West Hills Corporate Village, including the Rocketdyne division of Boeing Co. Rocketdyne is looking to expand from its offices in Canoga Park. The 30-acre West Hills office campus is currently under construction and scheduled to open this fall. Hughes Missile Systems formerly occupied the site, which Beverly Hills-based development company Regent Properties, in partnership with the investment group Shamrock Holdings Inc., is redeveloping into a new office campus. The developers are renovating 420,000 square feet of pre-existing space and building 170,000 square feet of new buildings. Premiere project Burbank’s newest redevelopment area has its first project lined up. Crown Realty and Development Inc. paid $8.5 million to buy a six-acre site at the northwest corner of Alameda Avenue and San Fernando Boulevard in Burbank. The L.A.-based company plans to build a 75,000-square-foot retail center that will be anchored by a Ralphs grocery store and Sav-On drugstore, said Jim O’Neil, senior vice president at Crown. The site, which now houses a mini-storage facility, is already entitled for a retail development, according to O’Neil. Construction is scheduled to begin this summer and be completed by late 1998. Craig Stevens of The Stevens Co. represented the buyer, and Brett Warner of Lee & Associates Commercial Real Estate Services represented the seller. Old-fashioned flavor The master-planned community of Valencia is about to get an old-fashioned Main Street. Construction began last month on a five-acre entertainment-retail center that will anchor a new $100 million expansion of the Valencia Town Center. The 100,000-square-foot entertainment-retail center, anchored by a 12-screen Edwards Theatres cineplex and an Imax 3-D theater, is one of the final components of the ersatz Main Street to get underway. Newhall Land and Farming Co., the company that has developed Valencia over the past 30 years, opened a three-story office building and health club last year. Construction began last year on a 250-room Hyatt hotel and a built-to-suit office building for Princess Cruises, which is relocating from Century City. The entire Main Street is expected to be completed this fall, said Marlee Lauffer, spokeswoman for Newhall Land. The half-mile-long, pedestrian-oriented retail project juts out of the existing Valencia Town Center regional mall, which was built in 1992. The tree-lined Main Street which actually runs down Town Center Drive is planned as an old-fashioned downtown: offices, hotels and apartments line the street, with ground-floor retail in each of the buildings. The new entertainment-retail portion is intended to generate nightlife, said Carl Meyer, a partner at Altoon+Porter Architects, which designed the street retail portion of the project. “It’s going to have the feel of a Larchmont Boulevard (in Hancock Park) or Colorado Boulevard in Pasadena,” Meyer said. Deal news Pacific Gulf Properties Inc. recently purchased the 125,000-square-foot Lurline Industrial Park in Chatsworth. It paid $7.5 million to acquire the four-building project from Koll Cornerstone, according to Scott Caswell of Delphi Business Properties, who represented the seller. The project is located near the intersection of Devonshire Boulevard and Corbin Avenue, and is about 95 percent leased In a closely watched sales effort, the owner of the Glendale City Center office building and adjacent development site is sorting through final bids from parties interested in buying the properties. About five parties, ranging from national real estate investment trusts to local developers, have submitted offers all in the $100 million range, sources said. A pension fund owns both the existing 18-story building, located at 101 N. Brand Blvd., and the adjacent site at the southwest corner of Brand Boulevard and Wilson Avenue, which is approved for a 22-story tower with 385,000-square feet of space. A buyer will be selected this month and a deal is expected to close this summer, according to Ron Azad, portfolio manager at Westmark Realty Advisors, who represents the seller. Once that deal closes, Glendale could see its fifth office building get underway in the tight office market. PacTen Partners and the Howard-Platz Group have already broken ground on their projects, while Reliance Development Co. and Maguire Partners have proposed office projects in the works. Joyzelle Davis covers real estate for the San Fernando Valley Business Journal.

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