Construction Project Props Up Slowly Improving Conejo Area

A new construction project reflects growing optimism in the Conejo Valley market. Denver developer Amstar has begun structural work on Phase II of the Westlake Park Place project in Westlake Village. The phase’s first building, a four-story, 102,000-square-foot midrise, is currently a skeleton of steel girders south of the 101 (Ventura) Freeway. It is the only major office construction project in the North Los Angeles market, according to data from the L.A. office of Colliers International. The project comes a point when the Conejo market is slowly improving. The vacancy rate slid two tenths of a point to 17.6 percent in the quarter, as the market absorbed a mere 10,500 square feet of space. But Mike Foxworthy, executive vice president at brokerage Daum Commercial Real Estate Services in Camarillo and leasing agent for Westlake Park Place, sees a growing need for Class A space. He said one tenant has taken the top three floors of the project – about 75,000 square feet – though he declined to disclose the tenant’s name. “We’re still looking for a couple of tenants with interest in the ground floor,” he said. “There will be no restaurants in the next phase, all professional offices.” In keeping with his optimism, Foxworthy’s asking rate for the project is $3.25, or more than $1 higher than the average rate for the submarket of $2.18, according to Colliers. “That would be the asking rent, and concessions will bring down the effective rent considerably,” said Bill Kiefer, partner at the Oxnard office of NAI Capital Inc. “If anything, that project is a vote of confidence for the region.” Elsewhere in the market, Camarillo Business Center secured two leases worth a combined $17.6 million, and Spirent Communications plc expanded its footprint at the Liberty Canyon Technology Center. Kiefer said employers are asking him about the implications of taking more space and increasing hires. “From a glass-being-half-full perspective, there’s more life in the market today than yesterday,” he said. Jeff Gould, senior associate in Colliers’ Encino office, said the activity points to incrementally increasing rents as the year progresses. “We are starting to see a tightening in the office market,” he said. “It’s not an across-the-board rise in rental rates, but a tightening in absorption. Now landlords are getting more confident on raising rents. I’m seeing an uptick in rates in certain buildings at certain locations.” However, a major deal last year could cloud the horizon – the $200 million purchase by L.A. developer Rising Realty Partners of a portfolio belonging to Bank of America Corp. of Charlotte, N.C. could put a lot of empty space on the market at any time. The Bank of America buildings, which formerly housed operations of defunct Countrywide Financial, include a 68,632-square-foot building at 29851 Agoura Road building in Agoura Hills and a 253,720-square-foot building at 31303 Agoura Road in Westlake Village, as well as other properties in Calabasas, Thousand Oaks, Simi Valley and Lancaster. “It doesn’t have an immediate impact on leasing because in reality BofA did a sale leaseback (at all the Conejo Valley properties),” Gould said. “But the long-term implication is that eventually BofA will start to downsize in the Conejo Valley, and that will impact absorption, vacancy and all that good stuff.” In fact, the downsizing has already started. Bank of America vacated a 63,600-square-foot property at 2900 N. Madera Road in Simi Valley late last year. – Joel Russell Main Events The North Ranch office building in Westlake Village was bought in February for $7.7 million by Chippewa Enterprises Inc. of Riverside from Toth Properties of Westlake Village. The 45,000-square-fooot office building at 31225 La Baya Drive was constructed in 1980 and is 48 percent leased. Tenants include YMCA and the Schroeder Center for Healthy Living. Gold Coast Health Plan, a public entity controlled by Ventura County Medi-Cal Managed Care Commission, took 33,000 square feet in Camarillo Business Center II at 711 E. Daily Drive in Camarillo. The 10-year lease has a transaction value of approximately $7.8 million. Also, during the final week of 2013, the federal government’s General Services Administration leased 26,000 square feet in Camarillo Business Center IV at 760 Paseo Camarillo. The 15-year lease is worth about $9.8 million. Digital storage firm LAC Group has moved into 40,000 square feet at the Conejo Spectrum office building at 1461 Lawrence Drive in Thousand Oaks. The Santa Monica-based company intends to use the space to house a film vault. It has a five-year lease with landlord Western National Life Insurance Co. of Amarillo, Texas. Cedar Valley Partners LLC of Woodland Hills sold a 20,000-square-foot Westlake Village office building in February for $3.1 million. The 31229 Cedar Valley Drive building was bought by Floyd, Skeren & Kelly LLP, a law firm that leases space there. In retail, a 21,000-square-foot building formerly occupied by Plummer’s Furniture at 244 E. Thousand Oaks Blvd. was sold for an undisclosed sum. The buyer was SNS Partners LLC, an investment firm with multiple parcels along the major thorough in Thousand Oaks. The buyer plans to market it to retail or office tenants. Conejo Valley Office Market At a Glance Inventory 6.78 million square feet Under Construction 102,300 Class A Asking Rents $2.18