Northwest Office Building Pace Off : Ventura, Valley Area High-Tech Construction Activity Stays Healthy

The reports of the demise of the high-tech real estate market in the San Fernando Valley and Ventura County are greatly exaggerated, judging from activity by large and small developers alike.

Doug Sonderegger of the Sherman Oaks office of Coldwell Banker Commercial Real Estate Services said that while the high-tech market has slowed considerably from its “robust absorption of space” a few years ago, it is not at a complete standstill.

Deals are being made primarily with companies with government contracts or those bringing new high-tech products into the marketplace, he suggested.

Several companies are experiencing business reversals because of slowing sales and movement to overseas plants. This has resulted in a two-tier high-tech market, Sonderegger said.

The first tier consists of buildings that are newly constructed on recently purchased land, with ample parking and a high percentage of mezzanine space. The second tier consists of previously leased industrial buildings that have returned to the market, often at lower rates.

The second-tier phenomenon has occurred in Chatsworth, Northridge, Woodland Hills and adjacent areas. Occupancy factors are down, and landlords are concerned that continued production of new buildings will aggravate the situation, he said.

Traditional industrial activities or “low-tech” activities such as warehousing and fabrication have had a resurgence and are often leasing space in buildings that were originally improved for high-tech and R & D uses, he added.

Another bright spot in what is often a slow market is the record of multi-tenant projects throughout the Valley and adjacent areas. Such projects have buildings designed for the small space users, often from 1,500 to 2,500 square feet.

Two communities whose names begin with “V” are showing improvement, Sonderegger added. They are Van Nuys and Valencia.

Van Nuys, an older community that stretches from the east San Fernando Valley to several miles west of the San Diego (405) Freeway, is an attractive location to developers of office, R & D and corporate space, according to Sonderegger and his colleague, Carol Grant.

The Valley Corporate Park, at 16300 Roscoe Blvd., just north of the Van Nuys Airport, is being developed by the Linpro Co., a national development concern with Los Angeles offices at 11661 San Vicente Blvd., Brentwood. Designed for tenants who want airport access and a location away from the congestion of Ventura Boulevard, the five-building complex has about 160,000 square feet of space and is scheduled for completion this fall.

While the prime leasing area in the valley continues to be the Ventura Boulevard corridor, Grant said the 123,000-square-foot Sherman Way Plaza, 15350 Sherman Way (at Sepulveda Boulevard) in Van Nuys, is leasing very successfully. She attributes its success to good access to the San Diego and Ventura freeways, excellent parking and good support services in the area. Tenants include AT&T; Communications (about 53,000 square feet), Valley Presbyterian Hospital, City Corp., Great Western and Hartford Insurance.

“Sepulveda Boulevard is experiencing new office construction all the way from Ventura Boulevard north to Sherman Way,” Grant said.

Despite traffic congestion, the recently imposed height limit and other factors, buildings on Ventura Boulevard in Sherman Oaks and Encino continue to attract tenants from the Mid-Wilshire area, Century City and elsewhere in Los Angeles, Grant added.

She points to the success of the American Savings building cater- corner from the Sherman Oaks Galleria at Ventura and Sepulveda. Completed last January, the 375,000-square-foot building is now 76% leased.

Sonderegger said that Valencia and the Santa Clarita Valley in general have experienced rapid growth in recent years, a trend that shows no signs of weakening. The master-planned community of Valencia includes a 1,200-acre industrial park that attracts such firms as American Pharmseal Division of American Hospital, Lockheed-California and Sperry-Chivac. A 30-acre site within this industrial park was recently purchased by Katell Properties Inc., Torrance, with plans for development of about 500,000 square feet of industrial, office and high-tech space, he added.

Universal City continues to attract office tenants that once considered a Wilshire Boulevard address a necessary part of doing business, Grant said. By the end of the year, Texaco will have relocated from the Mid-Wilshire area to 10 Universal City Plaza, formerly called the Getty Tower. Another major tenant in the building is Traveler’s Insurance, combining its Encino and Mid-Wilshire offices in 45,000 square feet of space.

By far the major single area for office space in that part of the San Fernando Valley within the Los Angeles city limits is Warner Center, Grant said. Voit Properties, Woodland Hills, currently has 1.7-million square feet planned. Leasing activity remains strong, with many tenants relocating from Mid-Wilshire, Century City and Westwood.

So far this year, Warner Center Voit Properties has leased 168,000 square feet of new office space, with an additional 260,000 square feet taken in expansion space by existing tenants of Voit Proiperties, she said.

Major Corporations

The Conejo Valley--Agoura Hills, Westlake Village and Thousand Oaks--has typically absorbed about 220,000 square feet of office space on a total base of 2.3 million square feet available. The current vacancy rate is about 18%, Grant said. Corporate names such as IBM, Exxon, Burroughs, Bunker Ramo, State Farm Insurance and General Telephone have helped make the Conejo Valley one of the fastest growing communities in the Southland.

About 750,000 square feet of new office space has been completed there in the past two years, with another 243,000 square feet in four projects under construction, Grant added.

A major player in the Conejo Valley, as well as Simi Valley and other parts of the Ventura County, is Astral Properties International, Thousand Oaks, headed by physicist Dale E. Grenoble. His firm has nearly 500,000 square feet of space in varying stages of developing, including the 10-acre, 186,000-square-foot Cochran Business Park in rapidly growing Simi Valley. The three-building high-tech project opens this fall.

Organized in 1978, Astral has since brought to Ventura County such high-tech businesses as Wangtek, a manufacturer of streaming tape cartridges; Vitesse, a leader in the new field of gallium arsenide semiconductors; Amplica, a Comsat company that manufactures consumer communications satellites and the Burrough Corp.’s Workstation System Group research and development center.

Vitesse and Burroughs occupy space in Ventura County’s first 100,000-square-foot speculative building. The building, constructed by Oltmans Construction Co., Whittier and Westlake Village, was leased to the two concerns before it was completed, Grenoble said.

The Oltmans firm builds all the structures developed by Astral, he added.

“We are not developers for all industries,” he said. “Typically, our buildings are 25% to 50% office.”

While Camarillo, Thousand Oaks and Simi Valley are attracting larger users (20,000 square feet and up), the city of Ventura is largely geared to smaller businesses serving larger firms, he said.

“Many of the major oil companies have engineering and design facilities in Ventura,” he added. Astral recently completed the 10.5-acre Anacapa Business Center, an industrial/office condominium project in Ventura.

In Oxnard, construction is under way on the $32-million, 21-story second phase of the financial plaza project, a development of Martin V. Smith & Associates. Completion is scheduled for January, 1987, on the 310,000-square-foot building, designed by Ebbe Videriksen AIA, Architect & Associates, Sherman Oaks. When it is finished, the building will be the tallest between Los Angeles and San Jose, according to Martin V. Smith.

Massive Project

Developer Robert H. Schulman is scheduling a Nov. 1 completion for Mediterranea II on the north side of the Ventura Freeway at Reyes Adobe Road in Agoura Hills. Despite the name, the Schulman Development Corp. office project is the third in a series of three Mediterraneas.

“Mediterranea I, our 84,000-square-foot office condominium just down Canwood Street, was completed a few years ago and sold out within a year,” he said. “After that, we built the 25,000-square-foot Mediterranea III, which we leased fully about four months after it was finished.”

Mediterranea II consists of a 29,000-square-foot garden office building and a 3,900-square-foot free-standing building that would be ideal for a financial institution, according to Frank Nielsen of Schulman Development.

Across the Ventura Freeway from Mediterranea I and Mediterranea II, the Agoura Hills City Council has approved the 600,000-square-foot Agoura Hills Technology Park on 33 acres. Construction of the $75-million project is expected to begin this month. The architect is Herbert Nadel AIA & Partners, Santa Monica.

A development of the Katell/Ahmanson partnership, the park already has a commitment for 50% of its space from Teradyne Inc., a major Boston-based manufacturer of computer and semiconductor test equipment, according to Gerald L. Katell, president of Katell Properties Inc. His partner is Ahmanson Commercial Development Co., a unit of H.F. Ahmanson & Co., Los Angeles.

When completed, the massive project is expected to employ about 2,800 employees, with Teradyne Inc. becoming the biggest single employer in Agoura Hills. Teradyne has signed a contract with the Katell firm to acquire three two-story R & D buildings totaling 360,000 square feet on 19 acres, with a value of $37.4 million, Katell said.

The Woodland Hills office of Cushman & Wakefield of California Inc. is the leasing agent for the remaining buildings to be erected on the project, according to Charles R. Kanne Jr., a Katell company vice president.

Away From Congestion

Across Reyes Adobe Road from the Katell/Ahmanson project will be the Agoura Hills Holiday Inn, a planned 300-room facility for the hotel-short community. The first phase is expected to be completed next July and will have 150 rooms.

Also in the Ventura Freeway technology corridor is the Malibu Canyon Business Park, being developed on 16 acres at the Las Virgenes Road offramp of the freeway by the Johnston Group of Century City. The project is “a clear manifestation of the desire by business firms to get out of the congestion of the city,” according to Timothy Foutz of Grubb & Ellis.

While the emphasis lately has been on Ventura County, Chatsworth--the original “Silicon Valley South”--is far from being out of the running, according to James L. Hasselbach and John D. Montanaro, principals of Terra Development Corp., Santa Monica.

They recently completed the $20-million, 11.5-acre Chatsworth Tech Center at the northwest corner of Plummer Street and Canoga Avenue in Chatsworth. Designed by Hill Pinckert Architects, Thousand Oaks, the project was constructed by Oltmans Construction Co.

The first phase consists of two buildings, of 92,650 and 72,450 square feet, Hasselbach said, adding that the second phase will feature a third structure. The Seeley Co. is the leasing agent.

“The project is the first master-planned research and development park in the West San Fernando Valley built on free property,” Montanaro said.