hen developer Richard Weintraub bought land in Warner Center 10 years ago, he fully expected the neighborhood would be on the upswing. His Weintraub Real Estate Group purchased 3.4 acres from motion picture and film camera manufacturer Panavision, which was vacating its space. But Panavision took its time moving out of the building and now – one real estate boom and bust later – Weintraub is finally set to break ground this summer on a 236-unit mixed-use project at 6219 De Soto Ave. His timing, it turned out, couldn’t have been better. The project is moving forward under the new Warner Center 2035 Specific Plan, which the City Council unanimously passed in October and will allow larger scale development in the 1.5 square mile residential and commercial district. “I’ve always loved it here and thought that this type of development was going to happen,” said Weintraub. “It’s got the best demographics. If I were a young person, I would move there tomorrow.” That’s saying a lot from the Malibu-based developer, whose projects have included everything from the renovation of the Saint Vibiana Cathedral in downtown Los Angeles to the recent renovations of the Sportsmen’s Lodge Hotel in Studio City – a Valley landmark. Weintraub might have been at the forefront but other companies such as United Technologies Corp. of Hartford, Conn. and Paragon Commercial Group of El Segundo also are investing in the neighborhood, with potential plans for development under the new zoning plan. The Specific Plan will be most beneficial to multifamily developers, as the principle behind it is to turn Warner Center into a modern-day urban center, where professionals can live, work and play within walking distance. The plan includes a variety of changes from the 20-year-old plan it replaces. Most notably, developers have almost no height restrictions on most lots, subject to additional review for construction over 75 feet. In addition, the plan offers quick approval processes and much more flexible parking requirements. All in all, an expected 40,000 new residents and nearly 50,000 new jobs will enter the area over the next 20 years under its guiding principles, which divide Warner Center into eight neighborhoods with specific development guidelines. (See article page 18). Jeff Albee, executive vice president at the Woodland Hills office of Sperry Van Ness International Corp. of Irvine, said Warner Center is one of the few areas in the San Fernando Valley that offers developers a chance for that kind of vertical, dense construction. “There are only three things in real estate: location, location, location. And people are betting on Warner Center and that’s where the density will continue,” he said. “It might seem like overpaying now, but that’s where the demand will be.” Big buys The plan designates Warner Center as the area that runs just north of Vanowen Street, where Canoga Park hits the L.A. River, south to the Ventura (101) freeway, east to De Soto Avenue and west to Topanga Canyon Boulevard. Within those boundaries is the $500 million renovation, expansion and connection of the Westfield Topanga and Westfield Promenade regional malls by Westfield Group LLC of Australia. While the mega-project, dubbed The Village, which received City Council approval last year, isn’t directly affected by the plan, it’s expected that the 20 million annual visitors it will draw will spur other developers to take advantage of the new zoning. “We’re working to have the project completed within the next two and a half to three years, and we’re on pace,” said Larry Green, senior vice president of development for Westfield. One developer who paid top dollar to be near Westfield is Paragon Commercial. Consider the premium price tag the developer paid for a relatively mundane shopping center that runs from Erwin Street to near Victory Boulevard on Topanga Canyon Boulevard directly across the street from the planned Westfield development. Paragon bought the Woodland Hills Shopping Center in September. On the surface, the 110,000-square-foot center is not remarkable, and certainly didn’t warrant the $47 million Paragon dished out for it. That’s about $430 a square foot for a property that boasts Toys “R” Us, Off Broadway Shoes and some smaller restaurants and shops. By comparison, a 50,000-square-foot retail center at 20122 Vanowen St., just a couple miles away, sold for less than $100 a square foot. In Woodland Hills, only the Topanga Willows Shopping Center, a 10,000-square-foot property at 4900-4906 Topanga Canyon Blvd. sold for more. Sawtelle Iowa LLC paid about $446 a square foot for the property, which has been recently renovated and is south of Ventura Boulevard, servicing a much more residential community. “We believe in what’s going on there near the center,” said Jim Dillavou, a principal at Paragon. “We just like to own real estate in the right places. And this is the right place.” And while the center is fully leased and making money, Paragon has broad discretion in how it can redevelop the site under the new Specific Plan. Dillavou said the firm may consider a multitude of uses for the land in the coming years, which could include a complete tear-down and overhaul into mixed-use residential or medical offices. And about a block from the shopping center, Jones & Jones Management Inc. of Woodland Hills paid $88 million for a 477-unit apartment building in September. When Jones bought the building, it represented not only the largest multifamily sale in the San Fernando Valley. The building at 22100 Erwin St. in Woodland Hills was built in 1968. The developer has already changed the name of the building to The Reserve, from its previous title, The Mercer. The approximate $185,000 a unit the company paid was not substantial, but the more than 40-year-old building would not have attracted the same attention if it wasn’t for the long-term advantages of owning real estate in Warner Center. “The location is always key, and the development coming to Warner Center is an added bonus,” said Krystal Dry, management executive for Jones & Jones. Dry said work is already underway on renovations, which include new granite countertops and new flooring. In addition, the developer has also put a new fitness center into the complex. Dry said the firm will look to bump up the rent prices as the renovations proceed, but would not disclose rates. “This is a great area to buy and we plan to hold this building long term,” said Dry. Institutional players The other mega-project in the area has been proposed by United Technologies, which plans to turn the 47-acre Rocketdyne site on Canoga Avenue and Victory Boulevard into its own urban neighborhood with a hotel, multifamily housing, offices and retail. The firm sold off its Pratt & Whitney Rocketdyne unit to GenCorp. of Sacramento for $550 million last summer, leaving the site vacant. UTC declined to disclose its exact plans for the site, stating it was “premature.” But Charles Veley, director of global real estate development, said in an email the company expects to “create a plan for the site that is consistent with the Specific Plan and the residential and commercial character of the area.” The firm hired Boston Global Investors to work on the design of the project, which could include about 4 million square feet of residences, 1.1 million square feet of office space, an assisted living facility, hotel and more. There are also several older, landmark properties in the Warner Center that are expected to receive complete overhauls soon, including the Panavision site. Weintraub hasn’t decided if the 200,000-square-foot development will feature condominiums or apartments yet, but said it will include a restaurant on the bottom floor. In addition, Weintraub said the property will have all the expected luxuries of urban apartment living, including a resort-style pool and state-of-the-art fitness center. Dinerstein Cos. of Houston owns a separate part of the Panavision site and has begun work to build a nearly 400-unit apartment building. And Weintraub also has another site in his crosshairs. The Catalina Yachts site, which houses a 50-year-old nearly 184,000-square-foot industrial building at 21200 Victory Blvd., was vacated about five years ago. The shipbuilder, which was founded in 1970 and moved its headquarters to the Woodland Hills site about four years later, closed the plant to move operations to Florida. There is no date for the redevelopment of the lot and Weintraub, whose firm is in escrow on the land, would not comment on his plans. There were previous reports of plans to construct a massive 600-unit apartment building at the site. “There really is a lot of pent-up demand,” said Weintraub. “And the more apartments you build, the more businesses will come.” That’s not the only older lot set for recasting. Sierra’s Mexican Restaurant, a Valley institution, went up for sale in August. The restaurant operated on the land at 6819 Canoga Ave. for 43 years before closing up shop last year. The property, with about 438,000 buildable square feet, is owned by the Jaramillo family, who ran Sierra’s and Mission Burrito restaurant next door. The Jaramillo family did not return calls seeking comment. Lonnie McDermott is a land and multifamily specialist at the Encino office of Marcus & Millichap Inc. and one of the brokers for the Sierra’s land. He took the 2.2 acres to market without a price, anticipating a lot of interest from multifamily developers eager to build on a lot directly across the street from the Westfield Topanga shopping center. He anticipates the land sale to come in around $15 million to $20 million and expects a decision by the end of the quarter. “We’re getting a lot of interest across the board, from local developers all the way to the institutional groups,” said McDermott. “Our site is literally the gateway in and out of Warner Center and highly attractive to any developer.” Ripple effect And while Warner Center is only a 1.5-square-mile area, the new Specific Plan will affect adjacent areas as well. On Ventura Boulevard, footsteps south of the freeway, Sares-Regis Group of Irvine expects to complete its 340-unit luxury apartment complex called The Boulevard. The 20600 Ventura Blvd. complex will feature a mix of studio, one- and two-bedroom units. But the pricing is clearly geared toward the professionals in Warner Center, as a studio will set you back $1,700 a month. “We’re looking for young professionals who work in the area and can appreciate the superior location,” said William Montgomery, president of acquisitions and investment for Sares-Regis. The project will also feature multiple swimming pools, a professional-grade fitness center complete with free weights and cardiovascular equipment, a media center, a game room, and both an indoor and outdoor spa. Montgomery would not disclose costs on the project, but Sares-Regis paid $32 million to buy the land in July 2011. “The tide is rising so it’s lifting all of the boats around it, like those neighboring properties,” said Albee from Sperry Van Ness. “We’re not used to Warner Center being a central hub, but it is now. And we’re just getting started.” The development proposals haven’t been without some pushback. The Woodland Hills Homeowners Association filed a lawsuit in 2012 to slow down Westfield’s Village development, arguing the Costco and adjacent gas station would violate building guidelines by encouraging car use – while a key aim of the Specific Plan is to make Warner Center a more pedestrian-oriented area. However, the suit was dismissed last summer. And since then, the L.A. City Council approved up to $59 million in tax breaks over the next 25 years for Westfield to help speed the project along. Gordon Murley, president of the homeowners group, would not comment on the past litigation. He said he supports new development but has reservations. “We’ll have to wait and see what comes out of these developments coming in under the plan,” he said. “There are some people who want absolutely nothing done, but our main concern is whether or not the city will stick to the plan or gut it like has happened on other occasions.” Other community groups are more gung ho. Scott Silverstein, chair of the Woodland Hills Warner Center Neighborhood Council and a commercial real estate broker at the Calabasas office of Lee & Associates, said the plan will bring more work opportunities. “We’re trying to get good jobs and good companies into Warner Center,” he said. “And you have to have the amenities to attract them. We’re hoping this plan will create an area that’s a magnet.”
Urban Suburban
