Los Angeles County's Department of Children's Services has agreed to relocate about 250 employees from two sites near downtown L.A. into the Wateridge Park complex in the Fox Hills district near Culver City. The $13-million transaction is one of the biggest office leases in the vicinity since before the recession.
The county's 10-year lease of about 53,000 square feet virtually fills the Wateridge Park complex atop a bluff on the north side of Slauson Avenue and could even trigger construction of the area's first sizable office building in nearly a decade.
The Fox Hills district's rising fortunes could soon result in a development deal if his client comes to terms with the right tenant, said Steve Solomon, the Seeley broker who helped Wateridge owner Legacy Partners of Foster City, Calif., buy the property and lease its vacant offices.
Development prospects in Fox Hills remain promising despite DreamWorks SKG's decision last week to pull out of its eagerly anticipated studio development at the nearby Playa Vista planned community, Solomon said.
"The Fox Hills market has changed dramatically and really taken off on its own," Solomon said. Burgeoning demand for office space has boosted rental rates 30% during the last two years to as much as $2.25 a square foot per month.
The Fox Hills district saw substantial development in the 1980s, primarily as a nearby but lower-cost alternative to the pricey Westside districts stretching from Beverly Hills to downtown Santa Monica.
But the recession early this decade sharply reduced demand for office space just after the construction boom, and mortgage holders ended up controlling a majority of the district's better buildings.
But economic recovery has turned Fox Hills around; virtually all the better buildings boast vacancy rates of less than 10%. The county's move to 5100-5110 W. Goldleaf Circle leaves the Wateridge complex 98% leased.
Licato Realty represented the county in the lease negotiations.