Voit Out of Warner Center Deal After Dropping Price

Voit Out of Warner Center Deal After Dropping Price Real Estate by Shelly Garcia The Voit Cos. has been eliminated from negotiations to acquire a portion of Warner Center Properties. Voit officials said they were forced to lower their bid after learning of additional costs the seller planned to pass along. “We were willing to go forward, but at a different price,” said David Allison, COO of Voit. Allison said the sellers of the property, a joint venture between Alaska Permanent Fund Corp. and Harvard University’s endowment fund, have not been in touch with the company since they sent the revised bid, but he believes they are now considering a different bidder. Voit last month had been selected, along with Douglas Emmett & Co., from an initial group of about 20 investors who expressed interest in acquiring the 15 low-rise properties and six high-rise buildings that comprise the 2.3-million-square-foot business hub. Sources said Voit initially offered $63 million for the low-rise properties. According to Allison, who would not comment on the pricing, the company relied on information provided by brokers in making its initial bid but, in later conversations with the sellers, was advised of additional costs the company would have to incur. “They were asking us to pay for certain things that weren’t reflected in our pro forma,” Allison said. “So we had to revise our offer price downward.” Douglas Emmett is going forward with its plans to acquire the six Warner Center high-rise buildings, according to sources. (The company has declined to comment on the transaction.) At least three other serious bidders put their hats into the ring for the low-rise properties, sources believe. AEW Capital Management LP, the asset managers for Warner Center Properties and the company advising the sellers, declined to comment. Voit chairman Robert Voit was the original developer who built much of Warner Center in the 1970s. Simi Rehab A few years ago you could barely get a national retailer to take a second look at Simi Valley. Things were so grim, in fact, creditors foreclosed on a 300,000-square-foot shopping center there after several tenants went belly up. Today, new owners have acquired the center and are planning a $30 million rehab, secure in the belief that if they build it the retailers will come. “The market has changed,” said Scott Yorkison, vice president at KMI Real Estate Group Inc., a developer that closed escrow on the center, Mountaingate Plaza, last month. “There are now retailers that five years ago would not have even entertained going into Simi Valley actually looking at it as a viable market.” In just over 10 years, the population of Simi Valley has grown 15 percent to 116,505 and the median income of those residents has jumped 40 percent to $75,579, according to city officials. The area is home to major employers including Countrywide Funding Corp. and Farmers Insurance Group, as well as a number of mid-sized manufacturing firms. Perhaps best known as the setting for the trial of Los Angeles police officers charged with beating motorist Rodney King the jury’s acquittal set off the Los Angeles riots in the early 1990s Simi Valley began drawing attention from housing developers in the late 1980s. But the recession that followed stymied those efforts, and the area remained relatively undeveloped until a few years ago. “In the early ’90s, there was a pent-up amount of building permits for projects that were never built,” said James Purtee, deputy director of economic development for Simi Valley. “We’re running through that backlog now.” “If you were looking at where growth is going to happen, the majority is in the northwest portion of town,” he said. Not coincidentally, that is where complexes including the Tapo Canyon Shopping Center with a Regal Cinemas movie theater and Home Depot have opened within the last two years, and where Mountaingate, at Los Angeles Avenue and First Street, is located. The new owners hope to carve out a niche for the complex by expanding on the types of retailers already in Mountaingate and considering expansion there: off-price retailer T.J. Maxx, crafts chain Michaels and Bally Total Fitness, among them. “Right now it looks like it will take more of a soft goods neighborhood,” Yorkinson said. “T.J. Maxx is going to stay; Michaels is going to stay. We’re looking to complement those types of users.” Chris Wilson, president of Wilson Commercial Real Estate, who represented KMI in the purchase from CRIIMI MAE Inc., and has just begun to market the center, said he is fielding inquiries for space. “The interest we’re getting is strong from tenants in the 15,000 to 30,000 range,” Wilson said. Valencia Residential Complex BRE Properties acquired 7.35 acres at Valencia Boulevard and Old Road in Valencia with plans to build a 234-unit apartment complex. The purchase price was $11.2 million. The apartment complex will become part of a master-planned community under development by Newhall Land and Farming Co., according to Mike Haviland, Santa Clarita economic development director, that will eventually include about 670 homes and 330 attached townhouses along with additional apartments and a golf course. Fred Cordova, a broker with Cushman & Wakefield, represented BRE in the transaction. The seller, Newhall Land and Farming, was represented in-house by Keith Herren. Shopping Center Planned Hopkins Real Estate Group, a Newport Beach-based developer, has completed the acquisition of 7.4 acres in Valencia for $4.2 million with plans to construct a 70,000-square-foot shopping center on the site. The center, to be called Highbridge Crossing, will be located at Cooper Hill Drive and Newhall Ranch Road. It is slated for completion in spring 2003 and is currently 50-percent pre-leased. Ray Bayat, Mitch Bayat, Bert Abel and John Cserkuti of Grubb & Ellis represented the buyer and seller, Newhall Land and Farming. Senior reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14 or by e-mail at [email protected].