Developers Court 4 Firms Seeking Leases : Real estate: The potential transactions, which involve growing companies looking for more office space, have been valued at about $200 million.
Recession-weary developers are competing for lucrative leases involving four growing San Fernando Valley companies that are seeking nearly a million square feet of potential new office space.
The companies looking for more space include 20th Century Industries, an auto insurer based in Woodland Hills; Health Net, the state’s second-largest health maintenance organization, also headquartered in Woodland Hills; and UniHealth America, the nation’s fifth-largest hospital operator, whose main offices are in Burbank.
Real-estate brokers not involved in the negotiations have valued the potential leases at about $200 million. But representatives from the three companies said it was too early to put a price on the leases because negotiations are either still under way or have not yet begun.
The fourth company is CareAmerica Health Plans, a health maintenance organization that is a subsidiary of UniHealth. It plans to move from its Chatsworth headquarters to new offices in the West Valley in the next three to four years, UniHealth spokesman Ross Goldberg said. Another UniHealth subsidiary, CliniShare, which operates in-home care programs and is also based in Chatsworth, is considering moving, Goldberg said.
Of the companies, 20th Century represents the biggest catch. The 33-year-old insurer wants to lease 350,000 square feet of office space for 15 years, plus an option on up to 150,000 square feet, to accommodate its growing staff and consolidate some operations now run from 13 satellite offices. 20th Century currently occupies a 225,000-square-foot office building on Owensmouth Avenue.
For 20th Century and the other tenants, the commercial real-estate slump could mean sweet deals from lease-hungry developers.
“This clearly is a good time to be looking,” said Health Net spokesman Jim Lucas.
Health Net occupies 120,000 square feet of office space but needs to move into a site with at least 180,000 square feet on a 15-year lease with an option to expand by another 20,000 to 70,000 square feet, said James Travers of Travers Realty Corp. The Los Angeles brokerage firm represents both 20th Century and Health Net in their current lease negotiations.
The developer with the most at stake is the Voit Cos., Warner Center’s biggest landlord. Voit could lease more than 400,000 square feet of additional space if Health Net decides to expand its current quarters in a Voit-owned tower called Warner Plaza I, and if 20th Century relocates to a newly completed Voit building called Warner Plaza III.
If both Voit deals go through, they could provide a big boost to the sluggish West Valley commercial real estate market, which had the Valley’s highest vacancy rate--26.3%--in a recent survey by the real-estate services firm Grubb & Ellis.
But there would be a sudden glut of vacant office space in Warner Center if the companies move elsewhere and no replacement tenants are quickly found.
In addition to Warner Center, Health Net is considering a move to Thousand Oaks, and 20th Century has reportedly been in discussions with the developer of a Calabasas complex called Calabasas Park Centre.
Both companies said they have not decided on a lease, but Health Net has indicated it plans to make a decision by the end of the year. 20th Century has said it hopes to decide sometime next year.
Meanwhile, UniHealth is studying its future expansion needs, which include placing its headquarters under one roof. The company currently occupies two buildings across the street from each other in Burbank. UniHealth spokesman Goldberg said the company wants to keep its headquarters in the East Valley, but he said no specific sites are currently under consideration.
