Warner Center shakeup as Anthem Inc. makes $90-million office move
When Anthem Inc. departs from its longtime Warner Center offices next year for new digs nearby it will leave behind one of the biggest empty buildings for lease in Los Angeles.
The 14-story Oxnard Street tower that the health insurer has occupied since the 1970s contains about 450,000 square feet — seven times more than the White House.
But that’s still not as big as something else the move stands to encourage: the development of the 25 acres surrounding the building.
That prime acreage is now largely covered by landscaping and parking lots that could have a far higher use as the office district inches toward becoming more of a bustling urban center.
The Warner Center 2035 Specific Plan adopted in 2013 promotes the construction of housing, shops and restaurants, and practically amounts to a welcome mat for builders.
It allows as much as 30 million square feet of commercial space, double what exists, and removed caps on building heights in most of the 1.5-square-mile district bounded by the 101 Freeway, Vanowen Street, DeSoto Avenue and Topanga Canyon Boulevard.
Developers already are working on billions of dollars’ worth of projects that will go a long way toward creating a neighborhood where people get out of their cars and walk around, but few parcels are as prominent as the centrally located one at 21555 Oxnard St.
When Anthem is gone, the building, owned by private local investors, will be refurbished and upgraded for new tenants, said Carl Muhlstein of JLL, a real estate broker who represents the landlords.
Center Point, as it is now called, will be the biggest block of office space available to rent in the San Fernando and Conejo valleys, he said.
But Anthem, which sold the office tower years ago, still owns the surrounding parcel and put it on the market a year ago in hopes of selling it to a developer.
The 2035 plan anticipates that the property will be developed with residential buildings and commercial uses such as offices, shops and restaurants, said land use entitlement consultant Brad Rosenheim.
“It has tremendous potential for new utilization,” he said.
Anthem did not respond to requests for comment about the status of the planned land sale.
Anthem is not bailing out of the region. It’s only relocating late next year to Campus @ Warner Center, a six-story office complex built a decade ago at 21255 and 21215 Burbank Blvd. that is co-owned by Lincoln Property Co. and Angelo, Gordon & Co.
Its long-term lease is valued by Lincoln at about $90 million, but the deal says a lot about why Warner Center is being transformed. Anthem is taking about 170,000 square feet, a little more than a third of its prior space.
An Anthem representative declined to explain the reduction but office tenants have commonly shrunk their footprints in recent years as more employees work from home and open-plan offices now in vogue put more workers in less space. Computerization also has eliminated the need for file cabinets, libraries and other storage that once took up a lot of room.
Years ago, companies conservatively estimated that they needed 250 square feet per employee, said real estate broker Corey Davidson of Savills Studley, who represented Anthem in the new lease. ”Now that number would be generous,” he said.
Other offices that are being transformed include the decidedly suburban-looking Warner Center Corporate Park, a 350,000-square-foot complex composed mostly of islands of low-slung concrete and black-glass buildings separated by parking lots.
Property owner Michael Adler and his financial partner LLJ Ventures unveiled plans last year to turn the campus into a 2.6-million-square-foot development where people could live and work.
The partnership is seeking approval to replace the 1980s-era park with more than 1 million square feet of modern offices, 80,000 square feet of stores and restaurants, 1,000 residential units, 68 live-work units and a 228-room hotel. There would also be parks and pedestrian-oriented open space.
The plan is to build out the office and other commercial areas of the development over 15 years or more as leases expire but to start on the apartments in about 18 months.
The availability of building opportunities in Warner Center, situated in the well-off community of Woodland Hills, has been a magnet for developers small and large.
Shopping center giant Unibail-Rodamco-Westfield is working on a $1.5-billion project to demolish its obsolete Promenade shopping mall on Topanga Canyon Boulevard. Dating from 1972, it will be replaced with an expansive mixed-use complex with about 1,400 residences, two hotels, shops, restaurants and an outdoor sports and entertainment venue.
Another deep-pocketed developer is Triple Five Worldwide, a Canadian real estate giant that owns the Mall of America in Minnesota and other big properties. It is buying the site of the closed Rocketdyne plant on Canoga Avenue where engines were built for the Saturn 5 rockets that took Apollo astronauts to the moon.
The 47-acre parcel, in escrow for a reported $150 million, is designated by the specific plan for a high-rise urban neighborhood with as much as 4 million square feet of residences, 1.1 million square feet of offices, hotels and stores. It is to have a central park, performance spaces and pedestrian paths.
Although Triple Five is known for shopping centers and tourist attractions, the company intends to build a residential community in Warner Center, not a mall.
Vice President for Development James Grindstaff said Triple Five has plans for “a unique urban village” that will “provide world class amenities and a modern approach to Valley living.” Designs should be released in the coming months.
If such projects proceed, they would supercharge the housing construction that has been picking up since 2000. Some 4,400 units have been completed since then, and there are 1,800 more under construction and an additional 4,300 units have been approved or are in planning stages, real estate broker Dean Zander of CBRE said.
Los Angeles City Councilman Bob Blumenfield, who represents the area, supports development that includes housing within reach of middle-income workers.
“We simply don’t have affordable housing in Warner Center,” Blumenfield spokesman Jake Flynn said, “and that’s a big problem.”
Twitter: @rogervincent
