RE Column

SFVREColApr/bb/22 inches/mike1st/mark2nd Two of the hottest real estate markets in and around the San Fernando Valley Glendale to the east and the Santa Clarita Valley to the north each saw noteworthy investment and development activity during the last month. Downtown Glendale, where top office buildings have been filling quickly due primarily to expansion in the thriving entertainment sector, is about to see Southern California’s first major “speculative” highrise office tower of the 1990s. And just last week, city officials and private developers broke ground on the long-stalled $30 million Glendale Marketplace entertainment-oriented retail center at Brand Boulevard and Broadway. The 160,000-square-foot project near the Glendale Galleria regional mall already has four substantial tenant commitments: a 42,000-square-foot WOW! (the Good Guys/Tower Records combo), a 40,000-square-foot Linens ‘n Things, a 36,000-square-foot Mann Theatres four-plex and a 15,000-square-foot Old Navy store. The private-sector developers of the two-building, two-story center slated for a spring 1988 opening are Regent Properties of Beverly Hills and the Tolkin Group of Pasadena. The city is investing more than $16 million to acquire property, relocate existing tenants on the site and construct an adjacent 1,100-stall garage. While the city considers the immediate neighborhood “blighted,” the average household income in the five-mile-radius trade area exceeds $50,000. CB Commercial Real Estate Group is handling leasing at Glendale Marketplace. Arden buys tower Fast-growing real estate investment trust Arden Realty Inc. of Beverly Hills just acquired the 11-story office tower at 535 N. Brand Blvd., a deal that appears nearly as entrepreneurial as the speculative development being pursued nearby. That’s because the building’s only tenant is Wells Fargo Bank, which inherited a lease of about 30 percent of the building’s 110,000 square feet of space when it acquired First Interstate Bank. Arden President Victor Coleman said the company will renovate the entire building and try to “reposition” it while retaining Wells as an anchor tenant. Arden purchased the property from a family trust of Arthur Gilbert, a longtime associate of Arden Chairman Richard Ziman. Coleman said Arden paid “under $100 a foot,” which would put the price at somewhere near $10 million. Arden has engaged Cushman & Wakefield Inc. to lease the vacant space. New project for Canyon Country Out in the Santa Clarita Valley, veteran Southern California builder Raznick & Sons is planning to develop the $20 million Trolley Square retail center in Canyon Country. Depending on tenant interest, the 200,000-square-foot project slated for a 12 acre-site is earmarked for either “big box”-oriented retailers or smaller entertainment- or automotive-related tenants. The site, a half-mile from a Price Club store and a Metrolink commuter rail station, features 675 feet of Sierra Highway frontage, which 35,000 vehicles pass daily. The average household income in the immediate trade area exceeds $60,000. Construction is scheduled to get under way late this summer, with completion slated for early 1998. Woodland Hills-based Raznick & Sons, established in 1930, recently completed a similar development named Trolley Plaza in Oxnard. Among Raznick’s other well-known commercial and residential projects are The Colony at Mandalay Bay Beach and Harborwalk in Oxnard, Beachwalk in Carpinteria, Alpine Village Apartments in Tarzana, The Center Promenade in Ventura and Encino Medical Tower in Encino. Westcord Commercial Group is the exclusive leasing agent for Trolley Square. Valencia apartments sell An affiliate of big apartment owner Western National Group has acquired the 208-unit StoneCreek Apartments complex in Valencia, from Newhall Land & Farming Co., Santa Clarita Valley’s dominant land developer. Irvine-based Western National paid $18.3 million for the 98-percent leased, 1985-vintage complex along McBean Parkway, said a source familiar with the deal. The sale contributed $12.8 million to Newhall Land’s income for the quarter ended March 31. The complex sits on 9.5 acres and includes 13 buildings featuring 16 units apiece. Amenities include fireplaces, pool, recreation center and spa. Newhall Land Chairman and CEO Tom Lee said the sale reflects the strong investment demand for “institutional-quality” apartment properties. He added that Newhall Land plans to reinvest the proceeds into the company’s aggressive commercial real estate development program now under way. Johnson Capital Group in Irvine arranged $11.8 million in acquisition financing for Western National through Prudential Insurance Co. of America’s PruEXPRESS lending program.