Why Valley Developers Are Preparing for Movement of Creative Users Over the Hill
Compression in LA's Westside office and multifamily markets and escalating rents are expected to drive creative office users to the San Fernando Valley, along with employees who prefer to live close to work.
That's what Rosenheim & Associates CEO Brad Rosenheim (right) told attendees at Bisnow's Future of the Valley event last week. He says Valley rents are half the cost of the Westside and Downtown LA, and predicts movement to the Valley will occur when people begin comparing dollar-for-dollar what they get in the Valley with these other markets. “This makes a compelling case to be in the Valley," he said, noting, for instance, that apartment rents in Santa Monica are $5/SF, while Valley rents are $3 to $4/PSF.
Developers are already preparing for an anticipated movement of office and residential tenants to the West Valley submarket. Rising Realty Partners is in the process of converting Park Granada, a 20-acre office campus to creative office. Rising SVP Marc Gittleman says there is a growing buyer pool for Valley assets, and the firm is open to selling or leasing.
Scheduled for completion in January, the 233k SF complex at 4500 Park Granada in Calabasas features a park-like environment with walking/jogging trails, outdoor fitness equipment, and lots of open spaces for events or meetings. “The outdoor spaces provide an opportunity to create a project that fits into the new version of how people work to live and live to work,” Marc said.
Laurus Corp CEO Phil Cyburt believes compression in the Westside’s Silicon Beach Tech Corridor is helping to drive development over the Sepulveda Pass. “You can’t develop there anymore," he says. Phil says Westfield’s Village project is making it easier for investors to look at Warner Center, which is seeing upscale multifamily rising.
Topa Management president Jim Brooks says if you can tie up and entitle land in good locations, you’ll create gold along the way. He also says the Conejo Valley offers big value-add opportunities for older multifamily properties as well, which can still be acquired for less than replacement cost.