Specific Plan Rethinks Westlake Village

Westlake Village may not be ready for its close-up just yet.  The Conejo Valley submarket hosts many corporate headquarters and sizeable real estate deals. But plans are currently underway that could create even higher-value real estate within two decades.  “Some properties, you’ll probably see entitled in the next couple of years because some of those properties are functionally obsolete,” said Mike Tingus, industrial broker at Lee & Associates. “The balance will come in the next five years at least.” Essentially Conejo Valley’s business district, Westlake Village straddles the border between Los Angeles County and Ventura County, encompassing just six square miles.  “There’s no vacant land; everything is developed,” Newmark Knight Frank Executive Managing Director John DeGrinis said of Westlake Village.  Since 2019, a committee of 10 has been revisiting the North Business Park Specific Plan to examine Westlake Village’s layout and rezone certain industrial areas for other uses. According to the commission in charge of reviewing the North Business Park Specific Plan, the goal is to create a guide for the inevitable redevelopment of the aging area on the north side of the 101 Freeway that is west of Lindero Canyon Road. Rather than responding to individual property owner requests for zoning changes, the city of Westlake Village views the specific plan as a framework within which redevelopment can take place. While California housing mandates identify the need to address new housing, including within the parameters of Westlake Village, the revising of the North Business Park Specific Plan is not a response to the housing crisis. That said, the committee overseeing the specific plan believes that there will adequate residential units included within the finalized plan which will help address the current state mandated allocation, as some of the projects that the rezoning will open the gates for will include developers interested in creating the live/work/play model — commercial enterprises with apartments, office units and retail and restaurant space on one property, like myriad sites currently under construction around Warner Center. While on the surface that might appear anathema to an industrial real estate broker, it is actually the opposite, as DeGrinis explained to the Business Journal.  “It will allow increased density, which will draw in reinvestment,” DeGrinis said. “They are considering a specific plan amendment that is essentially a roadmap that usually takes a city 10 to 20 years (to execute).”   DeGrinis, who has transacted myriad industrial deals all around the Conejo Valley, noted the pockets of Westlake Village where such rezoning could occur. For example, there’s the industrial and automotive-centric short street La Daya Avenue. There is also Corsa Avenue, where 10 properties could be reconfigured to create “some sort of campus” devoted to tech or biotech.  “With land being extremely scarce, a higher-end use would be better for the community,” DeGrinis continued. “It’s not eminent domain. It’s (creating) another opportunity for the land parcels (as) you get increased density.” Warner Center in Woodland Hills, DeGrinis said, is a great example of how the revision of the specific plan has upped value and the evolution from a clutch of warehouses in the 1970s to a cityscape of office towers, hospitality and hospitals, and now, with the Warner Center 2035 Specific Plan, an explosion of live/work/play development aimed at transforming Woodland Hills into the San Fernando Valley’s downtown.   “If we increase density, the value of the property goes up, allowing for higher-end uses,” DeGrinis said. “It’s a good thing for the tax base and it’s usually great for the community because it brings more jobs.” “It’s a good thing for the community,” agreed Lee’s Tingus. As one of Westlake Village’s 8,500 residents, Tingus has long been involved locally, and Westlake Village has always been developmentally challenged. “There’s no transportation corridor,” he said. “It’s always been a problem, especially when you get to Thousand Oaks and Newbury Park.” Amid all the older, obsolete buildings in targeted zoning areas, Tingus is listing 5701 Lindero Canyon Blvd., a 130,000-square-foot research and development property. “You can definitely do multifamily there,” Tingus said. Guitar Center headquarters notwithstanding, Tingus said, the rest of that whole quadrant is slated to be rezoned for multifamily and mixed-use. “We need the housing badly,” Tingus said, and even with 10- to 20-percent workforce units, which is essentially dead commercial space to a developer, “the value for multifamily far exceeds an industrial or office building. If I create multifamily, I can get twice the value for the land.” In fact, because of these eventual revisions to Westlake Village’s plan, DeGrinis said two of his land-owner clients have retracted their intentions to sell their properties until the rezoning is worked out. “We said, ‘Wait a minute, values are going to go up,’” DeGrinis said. “Let’s pull it off the market and wait till things evolve with this specific plan.” Recent transactions  Some high-profile sales have garnered attention in the past two years.  In May 2018, the former corporate headquarters for athletic footwear-maker K-Swiss in Westlake Village sold for $11 million in a deal transacted by Lee & Associates-LA North/Ventura.  By October 2018, Jafra Cosmetics sold its headquarters for $28 million with a leaseback contract to remain on the property.   In June 2019, Westlake Plaza Centre 2, an 84,098-square-foot office building at 2829 Townsgate Road in Westlake Village, sold for $18.3 million. One month later, Welltower gained a two-building medical office complex totaling 50,000 square feet in Westlake Village, spending $29.95 million on the acquisition.   The most seismic transaction came in September 2018 when the headquarters of Dole Food Co. in Westlake Village sold to the Agoura Hills-based Conrad N. Hilton Foundation for $50 million. Dole constructed a leaseback on a portion of 168,000-square-foot corporate campus on 10 acres at One Dole Drive.  This July saw another transaction exceed the $50 million bar when a massive multi-property office portfolio, totaling 256,602 square feet in Westlake Village, traded for $55 million. The portfolio consisted of two buildings covering 195,906 square feet located at 2801 and 2815 Townsgate Road; and a two-building, 69,707-square-foot campus at 100 and 200 N. Westlake Blvd.  In April, The Verona — a 16-unit multifamily property at 4506 Park Verona listed by Calabasas’ Marcus & Millichap Inc.— sold for $8.15 million.  Westlake Village has also seen several big lease commitments inked. In March, Anchor Loans relocated to Westlake Village with a 26,000-square-foot lease at One Baxter Way while financial services firm B. Riley Financial announced in July that it will abandon its Warner Center spoke to commit to 18,000 square feet at 30870 Russell Ranch Road.   Also in July, a local storage company leased a 52,800-square-foot industrial facility at 1467 Lawrence Drive.  Future possibilities  Once the specific plan is ironed out years from now, it will most likely give way to a rush of land sales, DeGrinis said.  There is also another untapped piece of land that rests with Westlake Golf Course, the Ted Robinson-designed 18-hole field at 4812 Lakeview Canyon Road. Given the golf industry’s downward trajectory, if that land became available, DeGrinis said, “a chunk that large would be a tremendous value.”  However, redeveloping it would not be a quick hole in one.  “That property is conditioned to be a golf course and a golf course only. It would take the hands of the city to change that use,” DeGrinis said. “It could be enticing, but there are legal issues that always come up with golf courses.”  That said, stranger things have happened, and, in a couple decades, present-day Westlake Village may no longer be recognizable because of the new development and in-fill which may proliferate.  “Anything is possible, especially in an area where we have such little land,” DeGrinis said. As Tingus noted, his own firm has bought a 22,000-square-foot office building at 5707 Corsa Ave. Lee & Assoc. plans to relocate its corporate headquarters from Calabasas to this new location by Jan. 1. Yet in 10 or 20 years, the property will appreciate greatly under the rezoning and the firm could sell the property to make way for more multifamily. “The city has very limited areas to go to,” Tingus said. “This is a perfect area to go to.”