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Thursday, Mar 28, 2024

Office Condo Project Takes Shape in Valley

Colliers International unveiled a new office condominium product in Warner Center in Woodland Hills last week. Developed by Larkspur, Calif.-based Venture Corporation, the commercial condo project is said to be one of the first of its kind in the Valley. The four-story 46,753 square feet building is located at 5900 Canoga Ave. in Woodland Hills. Venture renovated an existing building and broke it into 38 Class A office suites, ranging in size from 500 square feet to 12,000 square feet. Suites are priced at an average of $360 per square foot and units can be purchased separately or combined. Colliers reports that one unit is in escrow and there are three additional offers on the table. ?ffice condos are a concept Venture Corporation has used successfully in California, Oregon and Washington,?says Roger Beck of Colliers, adding very few have been tested in the San Fernando Valley area. Venture purchased the building in December 2007 for approximately $14 million or $300 per square foot, says Beck. The previous tenant was E & S International Enterprises, an owner/user. The bulk of 2008 was spent doing the partialization, gaining approval from the city and rehabilitating the interior and some of the exterior. Venture overhauled corridors, lobbies, and bathrooms. Suites come with demising walls, concrete floors and finished ceilings. ?his particular location is in the heart of a community with a lot of professional types of businesses such as lawyers, accountants, etc??says Ernie Knodel, senior vice president of development for Venture. ?iven the economic times, it? a great opportunity for business owners to buy.?p>Venture specializes in developing commercial condo properties, including: commerce centers that have smaller buildings with separate entrances for owners; professional centers that are one or two story office buildings; and medical offices. Venture Warner Center is the first time the company has converted an existing building into office condos, says Knodel. It chose the building because of the prime location and the fact that there were no other tenants locked into leases at the time of purchase. The market is tough right now, says Knodel, but Venture is adapting. ?ith vacancy rates increasing and rents decreasing, we?e introduced Venture Warner Center at a price point for where we thing the market is.?p>The condos are geared towards owner/users and not really positioned for investors, says Beck. The Vantage at Westlake is probably the closest comparable office condo development. The 34,000 square feet development by Vantage LLC was built from the ground up. It includes 23 Class A office units ranging from 900 square feet to 2,000 square feet. The complex was completed in the second quarter of 2008, and more than 90 percent of the units are sold, says Tony Principe, president of Westcord Commercial Real Estate Services. Prices average $540 per square foot, including a $25 per square foot tenant improvement allowance. Location and timing are everything with office condos, says Principe. ?he problem is some people try to build office condominiums thinking that people will buy in any building and location,?he says, adding he thinks one of the reasons Vantage at Westlake has sold so well is because it? in a first class location. Lenders are also increasingly providing financing for smaller spaces. Woodland Hills is a much larger market, says Principe, and Venture is coming in during a tough market. But the current market may play in the company? favor. ?he timing may not be great for the developer, but it is great for buyers,?he says. ?nd only the property owner knows if it? the right time to sell.?

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