RE Column

REColumnSFV-June/bb/ inches/mike1st/mark2nd Businesses of all sorts are continuing to lease up commercial space in and around the San Fernando Valley. And real estate entrepreneurs are finally responding with concrete plans for new developments. As the economy improves, Chatsworth in particular seems to be regaining its traditional position as a preferred office/R & D; location, as a couple of just-closed lease transactions illustrate. Netcom Systems Inc., which makes high-performance computer networking test equipment and systems, will substantially expand its administrative and production facilities in Chatsworth for the second time in just 14 months this time doubling its space to 50,000 square feet. Privately held Netcom will relocate from about 24,000 square feet to an adjacent building on Nordhoff Street, formerly occupied by CareAmerica Health Plans, within the Nordhoff Business Center. Scott Caswell of Delphi Business Properties represented both Netcom and the property owner, local developer Jerry Katell, in negotiating the five-year, $2.3 million lease. Netcom houses virtually all of its domestic development, manufacturing, administration, sales and marketing activities in Chatsworth. It also has a European operation based in Paris. In another expansion, DreamWorks SKG has leased a 124,518-square-foot office/industrial facility in Chatsworth for general office, production and storage uses. DreamWorks committed to the entire building at 21350 Lassen St. The property’s former long-time tenant the Sanyo Fisher Co. consumer electronics group relocated about two months ago to another Chatsworth facility. Matthew Miller and Jerry Porter of Brentwood-based Metrospace Corp. negotiated the five-year lease on DreamWorks’ behalf, while Tim Foutz and Bill Napier of Encino’s Capital Commercial Real Estate represented the property owner, SBD Group. Valley real estate sources estimated the lease’s value at between $3.5 million and $4 million. More expansions Over in the central Valley, two substantial manufacturing operations have agreed to expand into new digs. Window parts manufacturer Reflectolite Products Inc. will expand, upgrade and relocate from Sun Valley to a 97,567-square-foot industrial building in nearby Pacoima, which it has agreed to lease for 10 years. Reflectolite has leased the building historically known as the Familian warehouse which long-time tenant Familian Pipe & Supply will be vacating in June. Reflectolite plans to relocate around the beginning of September. The 1980s-vintage building at 12685 Van Nuys Blvd. is within the Pacoima Enterprise Zone, in which businesses receive state and local tax incentives. Capital Commercial’s Bob Scullin negotiated the $4.9 million lease transaction on behalf of the property owner Pacoima Partnership II, an affiliate of a family-run business with industrial real estate holdings in Los Angeles and Ventura counties, as well as in Phoenix and Las Vegas. CB Commercial Real Estate Group’s Greg Geraci represented Reflectolite in the lease negotiations. In a similar deal, medical instruments maker Pacesetter Inc. has agreed to expand into a 110,000-square-foot R & D; building that it plans to use for warehousing and office purposes. The pacemaker specialist, a subsidiary of Nasdaq-traded St. Jude Medical Co., will initially occupy about 65,000 square feet, then expand next March into the balance of the Talfair Avenue property in Sylmar, which is adjacent to the company’s headquarters, according to brokerage Grubb & Ellis Co.’s Jim Linn. He and Grubb & Ellis colleagues Todd Lorber, Allen Trowbridge and Steve Valenziano negotiated the five-year, $3 million lease (with renewal options) on the tenant’s behalf. Brett Warner and Larry Twomey of Lee & Associates represented property owner The Telfair Corp., which is controlled by a local family. Developers set plans With tenant activity abounding, developers continue to make plans for “speculative” projects (i.e. those for which construction commences without tenant pre-lease commitments) a clear indication that the Valley’s real estate markets are turning around. Cypress Land Co. is anticipating a final go-ahead from the City of Calabasas on June 12 for a 225,000-square-foot speculative mixed-use project, Calabasas Corporate Center, and expects to break ground on it by late summer, according to project attorney Mark Armbruster. The development at Lost Hills and Agoura roads just off the Ventura (101) Freeway is to include office, light industrial and R & D; buildings, and is slated for completion in the late spring or early summer of 1998. Armbruster noted that Calabasas’ planning commission tentatively approved the project at a May 8 hearing. He declined to disclose the project’s anticipated development cost. Calabasas is already seeing substantial “build-to-suit” (custom-designed) development activity in response to strong demand from corporate and high-tech tenants. Cypress Land, headed by the Harvey family, has primarily focused on the projects in the city of Cypress in northwest Orange County. The company currently has about 275,000 square feet of speculative office, light industrial and warehouse space under construction on about 15 acres there. Prudential Real Estate Investors will break ground in this year’s third quarter on a speculative phase of a Simi Valley industrial park. That phase is designed to contain more than 315,000 square feet. The two new buildings, totaling 184,635 and 132,850 square feet, respectively, will supplement existing facilities at the a 55-acre Tapo Canyon Business Center, where Guardian Medical and Standard Abrasives already collectively occupy more than 200,000 square feet. The industrial park had previously been known as Heritage Oaks and Peppertree South Business Center. CB Commercial’s Barbara Emmons, who is representing the park along with CB’s Darla Longo and Capital Commercial’s Scullin and Foutz, said the Simi Valley market boasts a 6 percent industrial vacancy rate. She added that no large facilities are now available, and that the marketing team is quite bullish about pre-leasing prospects for the new speculative phase. –30–