Warner Center Plans Readjusted as Office Space Grows Too Fast to Fill
The ear-splitting, 60-stroke-a-minute pile-driver poundings echoing from a controversial Canoga Avenue high-rise construction project have generated the most noise of any Warner Center development during the past few months.
But 15 other buildings that have more quietly popped up in Warner Center have added nearly a million square feet of new office space to Woodland Hills.
The building boom is leaving developers wondering where tenants will be found. Real estate leasing experts say Warner Center apparently only has the capacity to absorb about 250,000 square feet of new office space a year.
Although no one is calling the rental market glutted, the ballooning inventory of available office space is causing builders to put the brakes on some plans.
No Tenants for Tower
Warner Center’s largest developer has delayed construction of his fourth high-rise until he can lease at least part of a 12-story building that is nearing completion. Not one tenant has been lined up for the 205,000-square-foot tower.
Other developers are planning to divide construction projects in half, pegging the start of the second phase to the occupancy rate of the first.
“Development downstream could outstrip demand by 50%,” said Bill Ripberger, a Warner Center specialist with the the real estate brokerage firm of Cushman & Wakefield.
“But I think the absorption rate in the latter 1980s will be 400,000 or 500,000 square feet a year in Warner Center,” he added. “Of course, what is planned and what is actually built are two different things.”
Confident of Full House
Ripberger is leasing agent for a 90,000-square-foot office building nearing completion. It is about one-third rented, but Ripberger said he is confident it will be fully occupied by the end of the year. His company also will represent several other projects expected to get under way soon.
Although the rate of development in 1,100-acre master-planned urban area will depend on the rental market, “Warner Center hasn’t even busted the surface yet” with its growth, Ripberger said.
“It will be tenfold what it is today when it is finished,” he said.
Bill Inglis, a leasing agent with Coldwell Banker Commercial Real Estate Services who represents Warner Center’s primary developer, offered a more conservative growth estimate, however.
Low-Rise Space Scarce
“We’re about halfway through,” he said of Warner Center. “We have about 3 1/2 million square feet now in office space and we have another 3 1/2 million allowable under current zoning.”
Inglis has nearly run out of low-rise office space to rent for his client, Warner Center Properties, the area’s largest developer. High-rise space is another matter.
The top three floors of Warner Center’s tallest building, a 3-year-old, 20-story tower, remain unoccupied, Inglis said. And a 12-floor office building that will be ready for occupancy in July lacks a single tenant, he said.
Because of that, Warner Center Properties postponed a steel order planned for last January that would have launched work on a second 12-story building.
Free Parking Incentive
Inglis said low-rise buildings are easier to rent because of the availability of free parking for employees and easy access to offices. But high-rises offer improved views and easier expansion or contraction for companies as they grow or shrink, he said.
New office space is being leased for about $2 per square foot, although the upper floors of high-rises fetch about 25 cents a square foot more. Leasing experts say that Warner Center rents are about 10% less than new office space in downtown Los Angeles.
Unlike new high-rise office centers in Pasadena and Glendale that have uprooted tenants from such areas as Los Angeles’ mid-Wilshire area, the typical company moving to Warner Center now is one that is opening up a new branch office, according to real estate experts.
Hotel Expected to Help
Real estate brokers agreed that the scheduled opening of a new 17-story, 470-room Marriott Hotel this fall will help them rent Warner Center office space. The hotel will offer convenient accommodations for business travelers as well as a 13,000-square-foot ballroom and conference center.
The Marriott is being built on land leased from Warner Center Properties, which controls Warner Center’s 25-acre core area bounded by Oxnard Street, Canoga Avenue, Califa Street and Owensmouth Avenue. Warner Center Properties is a partnership managed by Robert D. Voit, president of the Voit Cos.
Voit’s core-area master plan calls for five high-rise office buildings besides the hotel and a low-rise office building. His total development at the site will cost an estimated $500 million and eventually will total 2.1 million square feet of office space.
A second Warner Center developer, Norman Kravetz, also has plans for a hotel. His project, the one that has used pile drivers in recent months to prepare high-rise foundations next to Canoga Avenue, has sparked controversy among land-use planners who contend high-rises should be restricted to Warner Center’s core.
Height Limit Defeated
Kravetz fought off attempts by Los Angeles city planning commissioners and Mayor Tom Bradley to impose a height limit ast fall when he won City Council permission to proceed with construction.
Kravetz has announced plans to build a 12-story, 350-room Hilton Hotel and two 17-floor office towers. He plans to call his eight-acre, 1-million-square-foot project at 6336 Canoga Avenue the Trillium.
Most of Warner Center’s other new development is occurring on its fringes, however.
Voit has just completed a 344,000-square-foot, 12-structure low-rise office complex on De Soto Avenue north of Burbank Boulevard on the Warner Center’s eastern edge. It is the second phase of his Warner Center Business Park, a fully rented, 750,000-square-foot office project in a three-block area south of Oxnard Street and De Soto Avenue.
2 Buildings Nearly Finished
Two-thirds of the new one-story offices have been leased, according to rental agent Inglis.
On the south side of Warner Center, two other developers have nearly finished two buildings that will add 435,000 square feet of office space this summer.
The Spound Co., a Century City development firm, has already leased a third of its 90,000-square-foot building at 21900 Burbank Blvd. to Informatics General Corp., Ripberger said. Informatics develops computer software and will employ about 120 people at the site. The $13.5-million building will have a concrete-and-glass, high-tech look, he said.
Next door, a 375,000-square-foot complex is being developed at Burbank Boulevard and Owensmouth Avenue by the Festa Commercial Realty Service. It will be called Warner Park Center, and its tenants reportedly will include the NCB Entertainment Group. The cost will be $67 million.
Projects on the Edges
According to real estate experts, most proposed office projects are also on Warner Center’s edges:
A 14,000-square-foot, two-story building being considered for the southwest corner of Oxnard Street and Topanga Canyon Boulevard. A savings and loan company reportedly has signed to occupy part of the building, which will have a curved-glass wall design.
A six-story, 200,000-square-foot building being considered for a site that is now parking on the southeast corner of Victory Boulevard and Canoga Avenue. Industry sources expect it to be started in 1988 and be ready for occupancy in two years.
A multi-building, 800,000-square-foot complex being designed for the east side of Topanga Canyon Boulevard, midway between Oxnard Street and Victory Boulevard. Construction could begin as early as the end of this year or early 1986 and the development could include a hotel, industry officials said.
