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Tuesday, May 24, 2022

Younger Rivals Spur Westlake Village Facelift

As competition continues to grow in the Westlake Village retail market, an old shopping center is freshening up. Regency Centers Corp. of Los Angeles is spending about $25 million on its 281,000-square-foot Westlake Plaza at 980 S. Westlake Blvd. The improvements include chopping up an 11,000-square-foot space formerly occupied by a Total Woman gym and constructing two additional retail pads measuring more than 8,000 square feet in total. The 5.5-square-mile city has a lot of retail, especially the 205,000-square-foot Promenade at Westlake by L.A. developer Rick Caruso and the 243,000-square-foot Target Center being constructed by local developer Dan Selleck. Regency is fighting back and its improvements have already enticed new stores to sign leases, including Mendocino Farms sandwich shop, Pitfire Artisan Pizza, Pressed Juicery, Ice Cream Lab and others. More than 30 years old, the center is anchored by three supermarkets, including a Gelson’s and Vons. “There’s a lot of demand out here, but then there’s also a lot of competition with Caruso and Selleck,” said Patrick Conway, vice president and regional officer for Regency. “If we don’t reinvest and make the plaza better than it was, retailers have other options.” Rachel Rosenberg, executive vice president at the Santa Monica office of brokerage RKF and leasing agent for the center, said the asking rate for the space has been about $4.50 per square foot and that the center isn’t budging on price. “In some cases, we’re even getting more than that. Leasing here is representative of tenants that are pushing the barriers outside of metropolitan L.A. And when they’re looking where to locate, a market like Westlake is perfect,” she said. According to the L.A. office of Colliers International, the average asking rate on retail real estate in the Conejo Valley is about $2.25 per square foot. However, Chris Pernevi, research manager at Colliers, said Westlake Village is more high-end and he’s seen asking rents as high as $5 per square foot. Regency is a major player in retail around the country, with more than 330 properties adding up to about 44 million square feet, including the Twin Oaks Shopping Center in Agoura Hills and Granada Village in Granada Hills. Conway said the renovations, which will also include some aesthetic improvements such as new landscaping, should be complete by October. “We don’t want to lose market share,” he said. Residential Infill An innovative Newport Beach infill developer is making a push into the San Fernando Valley. RSI Homes is in the process of closing on about six properties, including spots in Sherman Oaks, Encino and Van Nuys, where it plans to build 20 new single-family homes. The developer has built hundreds of homes in Orange County. “This is the first area in L.A. County that we’re moving into,” said President Peter Boutros. “There are tremendous opportunities.” The company has two typical business models. The first includes buying older houses in need of work, tearing them down and building new homes on spec. The second is what it calls the “Trade-Up Program,” in which an existing homeowner can sell their house to the company and use the equity to purchase a new RSI Home in the same neighborhood. The challenge with both models is gaining a large presence in a single Valley neighborhood, said Anita Rich, chief executive of the Rich Group, a division of Keller Williams in Studio City, who has partnered with RSI. “I’m looking at a very broad region,” she said. “I’ve got people in Burbank, Toluca Lake, Sherman Oaks, Studio City and the North Valley. We’re covered all the way to Agoura.” RSI, founded in 1989 as a cabinet manufacturer, builds many elements of its homes, including wall panels and floor systems, off site. It boasts the process allows it to construct a home in less than 90 days, from permit to move-in. Cashing Out A two-property multifamily portfolio in Glendale has traded hands for $24.8 million. The 49-unit Villa Monaco at 1234 E. California Ave. and the 36-unit Villa Geneva at 1304 E. California Ave. were purchased by the Stanley Sirott Trust in San Dimas from Jay de Miranda of Rolling Hills Estates. The sale closed May 15. Both properties were built in the late 1980s and were 98 percent leased, according to real estate data firm CoStar Group Inc. The seller was the original developer of the properties who wanted to retire. Jesus Henao, vice president at the Encino office of NAI Capital Inc., represented the buyer. Staff Reporter Elliot Golan can be reached at (818)316-3123 or egolan@sfvbj.com.

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