Big Office Update

A traditional Warner Center office building needs a big makeover to compete for tenants. As Anthem Blue Cross gets ready to relocate its workforce out of the traditional Abraham Lerner-owned structure at 21555 Oxnard St. in Woodland Hills — called the Anthem building but officially named Warner Landmark — the owner of 21555 Oxnard is eyeing the beginning of 2020 as the start date to renovate the stark brown building into a millennial-friendly office campus. Lincoln Properties Co. West is the developer in charge of the redux effort, which should take about the first half-year of 2020 to complete at an estimated cost of $50 million. “This is an unusual opportunity,” said David Binswanger, senior executive vice president at LPC West, in a statement. “Anthem has been a tenant in this building for more than 30 years. Now that their lease is expiring, ownership has a chance to revamp the entire property and start with a clean slate. I have no doubt it will serve as a catalyst to eventually reposition the entire block, so it can better serve the needs of this area today.” CBRE Group office brokers Matthew Heyn and Jeff Pion will handle the leasing of Warner Landmark version 2.0, which will soon replace the Anthem logo with “Warner Landmark” in a more modern font. “We’re going to start swinging hammers in January 2020,” Heyn said of the building’s overhaul, which marks the biggest overture to update the building since November 1993, when Lerner purchased the building for $76.9 million, or $177 per square foot. The ownership team has hired architecture firm CallisonRTKL, the same company that designed mega projects such as LA Live, the City Crossing and North Star Tower edifices in China, Space Needle Plaza in Seattle; and the U.S. Capitol Visitors Center. The project also involves Relm Studio, a landscape architecture and urban design firm. Single tenant Built in 1977, the 14-story Warner Landmark, which covers 434,204 square feet, sits on 6.28 acres of prime real estate in Warner Center — the corporate and commercial hub of Woodland Hills. During its 42 year history, the tower has had only one tenant: Anthem. “The building hasn’t been available to anyone since it was built,” said CBRE Senior Vice President Natalie Bazarevitsch. That will change next year as Heyn and Pion target young companies as prospective occupants. They hope that, for the first time, Warner Landmark will become a multi-tenant address. “We are going to reposition the asset as a creative office alternative that speaks to the culture of companies wanting new workplace environments for their employees,” Pion said. Warner Landmark’s refurbishing is in line with the bigger-picture Warner Center 2035 Specific Plan, which currently sees such builders as Canoga Park-headquartered California Home Builders, Evolution Strategic Partners of Studio City, and Levine Family Properties constructing nearby residential towers for millennial-and-younger population. If that goes well, it will attract young workers with thousands of new apartment units set to come online over the next few years. “The vision is to really make this the most contemporary office project that the San Fernando Valley has ever seen,” Bazarevitsch said, “targeting companies attracting and retaining top talent.” “What this building represents is the transformation that’s happening at Warner Center,” Heyn added, alluding to L.A. City Councilman Bob Blumenfield’s vision of Woodland Hills as the “Downtown of the Valley.” Conventional wisdom in the real estate industry is that young adults in their 20s and 30s prefer renting over home-ownership, residential environments with amenities over houses, and a live-work-play environment over commuting from the suburbs. “It’s even going to get better with millennials looking for quality of life, access to good schools,” Heyn said of the neighborhood’s pending in-fill. “You’ve got over 10,000 units on the way into Warner Center and they’re all going to be looking for jobs.” Kidder Mathews Executive Director William Boyd, an industry veteran in Glendale, said that such forward-thinking actions as the ones Warner Landmark’s owners and marketeers are embarking on may ultimately help deliver Blumenfield’s vision of a Warner Center success story. “The repositioning of an asset, like the (Warner Landmark) project that has appealed to a historical base of back-office use, may be the best strategy as some markets that compete with Warner Center, like Glendale, have struggled,” Boyd said. “Glendale’s office space vacancy has gone from 11 percent two years ago to 18 percent today.” Given the building’s full-block size and location, its redevelopment will have a ripple effect, Pion said. “The building is such an iconic structure located in the heart of Warner Center,” Pion added. “Repositioning will attract tenants to the market, which will be great for all of the surrounding properties — retail, residential and office. There will be nothing like it in the marketplace when we are done with the renovation.” Building’s bones CBRE’s Heyn said work on the building will be substantial, with tech and office floor planning, indoor/outdoor space, new lobbies and restrooms, and a lounge eating area. “The bones of the building are actually really good,” he added. Part of the remodel will include creating a new entry at Owensmouth Avenue as well as recreating the approach to the building to provide an open-air feel for new retailers and food vendors. The revamped property will provide ample parking, including below ground with direct elevator access to the floors. Also, the site will feature a state-of-the-art gym and conference center. Additionally, a new anchor tenant will have the opportunity for building signage. “As part of the renovation, we’ll be converting the basement level into executive reserve parking under the building,” he added regarding 80,000-square-feet of covered parking,” Heyn said. While things are still being worked out, according to Heyn and Pion, retail amenities will be part of the property reposition to serve both tower tenants and the surrounding market, notably through restaurants and a coffee shop. “We’re also looking to bringing top retail as well,” Heyn said. As for the interior of the office levels, expect “lots of glass,” as Heyn puts it, and office floors we will be retrofitted with exposed ceilings. “We’re definitely targeting entertainment and tech,” Heyn continued. “Those two are major drivers, but really any tenant of size that is looking for efficiency that you can’t find anywhere else in the Valley. That’s the vibe that we’re going after, but it will be at a complete value.” With the rejiggering of the floor plans, Heyn also sees the potential for a co-working firm moving in. “I imagine WeWork will take a run – two floors at a time,” he said. “This is a unique opportunity for a co-working provider.” As for naysayers who view Warner Center and Woodland Hills as inflexibly corporate and older-skewing, Boyd at Kidder Matthews maintains that anything could happen once the millennial-targeting residential towers in the works reach completion. “Many may not have believed 30 years ago that tech and media companies would have leased space in Playa Vista either, so perhaps Warner Center can evolve as well,” Boyd said. Catalyst for change Last July, health insurance giant Anthem announced that it had signed a lease to relocate its Woodland Hills workforce to 21215 Burbank Ave., also in Woodland Hills. The address is in the Campus at Warner Center, a development comprised of a pair of six-story office buildings, is co-owned by investment firm Angelo Gordon & Co. and by Lincoln Properties Co. West – the same company working to redevelop Anthem’s current home. Corey Davidson, Liron Nelik and David DiPietro of Savills Studley negotiated on behalf of Anthem in the transaction. Kent Handleman represented LPC West. Anthem Blue Cross, which will make the jump by year’s end, will occupy more than 169,000 square feet in the campus complex. “Anthem Blue Cross is an industry giant and we are thrilled they have found a home in Campus at Warner Center,” LPC Vice President Stephen Lindgren said in a statement last summer. “Our high-quality facilities and leading amenities will serve the Anthem team well and we are excited to welcome them aboard.” Executives for Anthem could not be reached for comment, but the health insurer, through a spokesman, conveyed excitement regarding its late-2019 relocation to “a newer, modern office building located a few blocks away.” “The move will enable us to provide improved work environments for our employees and enhance our strong, collaborative culture, as we focus on creating a better health care experience for the communities and customers we serve,” Anthem Blue Cross spokesman Mike Bowman told the Business Journal. “We look forward to moving into our new office in Woodland Hills and continuing to be an integral part of this community.”