Commercial Scene : Sepulveda Boulevard Is on the Rise : Emerging as a major, but complementary, office corridor to Valley’s Ventura Blvd.

With land prices roughly half those of congested Ventura Boulevard, with better freeway access and with fewer restrictions on building, Sepulveda Boulevard in Van Nuys is emerging as a new office corridor in the San Fernando Valley.

Sepulveda is not threatening Ventura Boulevard as a prestige office location in the Valley, but it is being upgraded with buildings that rival the more established street in design and amenities, according to developers, commercial real estate brokers, architects, city officials and building occupants.

A mix of single-user and speculative office buildings, free-standing stores and strip shopping centers will maintain the street’s reputation for diversity, but will change its character for office-space seekers, according to commercial brokers and developers, who see Sepulveda not as competing with Ventura, but as a complementary location for large-space users.

Leasing agent John Battle attributes much of the interest in Sepulveda Boulevard to the availability of fairly large parcels of land at about half the cost as sites on Ventura Boulevard.

Lower Land Costs

“Most of the Sepulveda sites sold have been in the $40- to $50-per-square-foot range, quite an escalation from the mid-$20 land prices of a few years ago, but well below the $100-per-square-foot and more charged for land on Ventura Boulevard,” said Battle, who handles properties on both Sepulveda and Ventura.

John Lewis of the Lewis Co., a developer active on Ventura Boulevard, said that recent Ventura Boulevard land sales have exceeded $100 a square foot. He said land on Sepulveda Boulevard has ranged from $35-$50 a square foot in recent sales.

“It only makes sense to develop the major north-south streets, like Sepulveda and Van Nuys boulevards, which are less congested than Ventura Boulevard,” said Dodo Meyer, principal administrative coordinator for the mayor’s office in the San Fernando Valley.

She said the city is pleased by the quality of development under way on Sepulveda and hopes the trend will continue on adjacent stretches of Sherman Way.

Freeway Access

A major factor in the new popularity of the Sepulveda Corridor is easy access from the Interstate 405 and U.S. 101 freeways, according to a number of sources, including building tenants.

Another factor that might account for Sepulveda’s emergence is its proximity to the Van Nuys Airport and the non-scheduled passenger and freight service available at the airport, Meyer said.

A major showpiece of the new Sepulveda Corridor will be Tri Center Plaza, a $35-million, six-story, 144,000-square-foot office building at the southeast corner of Sepulveda Boulevard and Oxnard Street.

Construction is expected to start in June on the project, with completion scheduled for June, 1990, according to the developer, Howard Smuckler of Saunders Development Corp., Woodland Hills.

Former Builders Emporium

Designed by the Nadel Partnership of West Los Angeles, the blue solar-glass-and-granite-faced building will go up on land formerly occupied by the original, late-1940s-vintage Builders Emporium home center, Smuckler said.

A new Builders Emporium has opened on adjacent land retained by the Wickes Cos., parent firm of Builders Emporium.

“We expect to attract attorneys, accountants, insurance agents, the same kind of professional tenants that would rent in buildings on Ventura Boulevard,” Smuckler said.

The Tri Center Plaza project was faced with restrictions on the size of building permitted on the 133,000-square-foot site, according to architect Robert Jacques of Nadel, which has designed about half a dozen new buildings in the corridor.

Floor Ratio Imposed

As a condition of the sale of the land to Saunders Development, Builders Emporium imposed a 1.1-to-1 floor-area ratio (FAR) on the site, allowing a 144,000-square-foot building.

The normal FAR in the Sepulveda Corridor is 1.5 to 1, meaning that a developer could build a 150,000-square-foot building on a 100,000-square-foot site, he said.

Tri Center’s leasing agent is Battle, of Beitler Commercial Realty Services in Sherman Oaks. He also puts together lease deals on Ventura Boulevard.

“Ventura Boulevard has a three-story height limit the entire length of the street, in contrast to Sepulveda Boulevard, which has no limit on the height of a building,” Battle said, in explaining the street’s popularity.

“The two areas are complementary, rather than competitive, since large-space users--those who need 20,000 square feet or more contiguous space--can often fill their needs more easily on Sepulveda.”

Large Space Limited

He said that only the City National Bank Building, 16133 Ventura Blvd., and the Encino Terrace Center, 15821 Ventura Blvd., can now supply 20,000 square feet or more on Ventura Boulevard.

Across Oxnard Street from the Tri Center Plaza site, at the northeast corner of Oxnard and Sepulveda, is the Electro Rent project, the first phase of which is a 84,480-square-foot building occupied by Electro Rent Corp.

The three-story, concrete tilt-up structure was designed by Nadel and built by Bernards Bros. Construction Co., San Fernando, according to Dan Greenberg, of Electro Rent.

The Electro Rent building has been honored by the Greater Van Nuys Chamber of Commerce for improving the Sepulveda Corridor, said Greenberg, chairman and chief executive officer of the 24-year-old electronic test and measurement sales and leasing concern.

Expects Transformation

He said he expects Sepulveda Boulevard to be transformed within three to seven years from its current mix of high-quality and “nondescript uses” to a major office/retail corridor.

The Electro Rent building will be followed by a 120,000-square-foot, six-story speculative office building that will face the current structure to form a courtyard, said leasing broker Madeline Schwartz of Coldwell Banker Commercial Real Estate Services, Sherman Oaks.

Greenberg said Electro Rent consolidated four locations in Burbank and Culver City at the Sepulveda Corridor site, which was chosen because of its central location and “excellent freeway access” from the Ventura and San Diego freeways.

“Our 180 employees at this location are split with about 60% living in the Valley and about 40% on the Westside, so the location is best for most of our people,” he said. “The access is ideal, especially compared with our old Burbank location near the airport.”

Transition Since 1982

Although the popularity of the Sepulveda Corridor seems recent, the street’s transition to a viable office market began about 1982, when Hal Baron Associates developed one of the first office buildings in the corridor, The Professional Building.

The five-story, 77,000-square-foot structure at 5900 Sepulveda Blvd. proved to developers that the world did not end at the Ventura Freeway, that office space users would go north of the freeway, according to Steve Weiss of Zugsmith & Associates, Studio City, a broker active with land assembly and lease deals throughout the Valley.

However, the northward movement took a little longer than most leasing agents and developers expected, Weiss said.

He added that Hal Baron of Baron Associates and Van Nuys Nissan dealer Fred Miller have owned the southwest corner of Sepulveda Boulevard and Oxnard Street for more than 10 years. The 60,000-square-foot site is occupied by a veterinary hospital and will eventually be developed as an office project, Weiss said.

Signed 20-Year Lease

In another major Sepulveda Corridor deal, Southern California Title Co. has signed a 20-year lease valued in excess of $11 million for the Marvel Building at the northwest corner of Sepulveda and Oxnard, according to leasing broker Weiss.

The title firm plans to occupy the 25,000-square-foot building, now the home of Marvel Productions, in three to four months.

Across the street from the Marvel Building and just north of Electro Rent, Costco is building a 150,000-square-foot membership discount store. The concrete tilt-up building is expected to be completed early next year, according to Battle of Beitler.

At present, going through a plan check are drawings for a an eight-story office building developed by Industrial Bank at the site of the bank’s current one-story facility at 5805 Sepulveda Blvd.

Parking on 3 Levels

The bank will occupy one floor of the five office floors of the building, yet another one designed by Nadel, with the rest of the space leased to other tenants, Weiss said.

There will be three levels of above-grade parking in the 88,000-square-foot building, he added.

Also new to the Sepulveda Corridor is what Weiss calls a “multistory business park,” the Erwin Street Business Center, 15500 Erwin St., Van Nuys.

The 320,000-square-foot project by Century Industrial Development Co., Los Angeles, was envisioned as a mini-storage facility, but has added users of office space, industrial space and research & development space, Weiss said.

The four-story structure is built on a 155,000-square-foot site on a long-term lease from the owners of the Sepulveda Drive-In Theatre.

‘Common in East’

“This kind of project is fairly common in high-cost urban areas in the East, but this is the first time one has been built in the San Fernando Valley,” Weiss said. “It’s a security building with office and warehouse space available in increments from 973 to 10,000 square feet, as well full floors up to 80,000 square feet.”

Rental rates range from 80 cents to $1.15 a foot per month, including tenant improvements, Weiss said. The architect is Myers, Nelson, Houghton Inc.

In yet another project, north of most of the other buildings, but in an area seen by virtually all those interviewed as an extension of the the Sepulveda Corridor, Hartford Insurance has leased 20,000 square feet in Sherman Plaza West, just west of Sepulveda Boulevard.

Sherman Plaza West, a five-story, 145,000-square-foot office building developed by Nagel Construction Co. of Van Nuys should be completed in May, according to leasing broker Allen Trowbridge of the Faulkner Co., Woodland Hills.

“The entry of the building, designed by the Nadel Partnership, faces the original Sherman Plaza, a 123,000-square-foot office building developed by Nagel Construction in 1983 at 15350 Sherman Way,” Trowbridge said.