Looking for a new luxury apartment at Warner Center in Woodland Hills? Now may be the time to act because more than 600 units are set to come online in 2010. In mid-January, Western National Property Management started leasing at The Enclave at Warner Center. The 195-unit new luxury apartment complex, located at 6710 Variel Ave., offers granite countertops, hardwood-style flooring, large patios and more. Western National purchased the property and obtained financing for the project before the credit markets froze over, according to Thomas Shelton, president of Western National. And the going rate for one and two bedroom units is $1,510 to $1,960. The Dinerstein Companies is also working on the 438 unit Millennium Warner Center luxury apartment complex on Variel Ave., which is likely to be delivered in Q3 2010. The $100 million + complex will apply for Leadership in Energy and Environmental Design (LEED) Silver certification. Since the project is still under construction, rental rates have not yet been established. All this new multifamily construction in Woodland Hills is great because it creates jobs and opportunities for tenants to rent new product. But can Warner Center handle so much luxury multifamily? When you drive down Canoga and Variel, new luxury apartments are a dime a dozen. The Pointe at Warner Center, Triana, and Archstone are just a few of the others. And Woodland Hills’ apartment vacancy rate was 11.5 percent in Q4 2009, more than double that of most Valley markets, according to Hanes Apartment Advisor. “Six months ago things seemed a little dire, with apartment rental rates decreasing and vacancies increasing,” said Jeff Louks, senior VP of investments for Marcus & Millichap. “But most clients are now filling up their vacancies.” Demand is being fueled by people moving in from out of state. Many families sold or lost their homes and cut overhead by moving into apartments. There are not a lot of new apartments. And rental rates have dropped 20 percent across the board, said Louks. The viability of new luxury apartments in Warner Center depends a lot on the area’s job base, he said. The complexes will have an effect on the amount of concessions being offered by luxury developments. But it would take thousands of new units to create a long-term glut in the market. The average asking rental rate for a one bedroom in Woodland Hills is $1,288, two bedroom $1,644, and three bedroom $2,255, according to Hanes Apartment Advisor. Mark Verge, owner of Westside Rentals, agrees with Louks and said more competition, especially in the luxury apartment market, is a great thing for renters. “I love when they build new things; It doesn’t hurt,” said Verge, adding it forces property owners to step-up their game. Warner Center is not as hot of a market as years past, but it’s still a desirable area. And demand in the West Valley has increased over the past few months, he said. The 2010 National Apartment Report by Marcus & Millichap said the Los Angeles apartment market is poised for improvement. Employment will remain soft in the first few months of the year, but it’s expected to expand by .3 percent this year. Rental completions will slow to 1,550 units, only a .2 percent increase in inventory. And approximately 800 of those completions are expected to come online in the San Fernando Valley. However, vacancy rates are expected to increase 20 basis points and lingering high unemployment will continue to pressure owners to lower rents, said the report. On the sales side, more offers are being written and more money is coming off the sidelines, said Louks. But there’s a lack of product out there, property values have dropped and owners are not selling unless they have to. Josh Vasbinder, West Coast partner of The Dinerstein Companies, believes in the Warner Center market. The 438 unit Millennium development has close proximity to downtown, Woodland Hills has a high quality of life, and the complex is situated a stone’s throw away from the Orange Line. The company also hopes obtaining LEED certification will set it apart from other new luxury developments. “People do care and want to live in a place that’s environmentally friendly,” said Vasbinder. CRA/LA Moves NoHo Office The following lease transaction in North Hollywood isn’t big in terms of square footage, but certainly worth mentioning. The Community Redevelopment Agency of Los Angeles signed a lease for 7,700 square feet of space at 5250 Lankershim Blvd. JH Snyder is the leasing agency. And the CRA is expected to move into the new space in April. The agency is currently housed at 5200 Lankershim. Staff Reporter Eric Billingsley can be reached at (818) 316-3124 or at [email protected].