Uptown at Warner Center is located in the City of Los Angeles within the affluent community of Woodland Hills, in the San Fernando Valley, both of which are a part of Los Angeles County. Los Angeles County is comprised of 88 cities and is the size of some countries. It spans more than 4,000 square miles and is the most populated county in the U.S.
The Site’s location is minutes north of the Ventura (101) Freeway and conveniently positioned in the center of a broad range of employment and housing options. Access to Sherman Oaks & Encino (8 miles), Studio City (13 miles), Malibu (13 miles), Burbank (15 miles), Universal City (15 miles), Hollywood (17 miles) and Downtown Los Angeles (25 miles) make it an ideal location for Southern California’s next dense, urban, transit-oriented, masterplanned community.
Home to the nation’s epicenter of the film and television industry, the San Fernando Valley (SFV) or “the Valley” as it is generally known, has about 1.8 million residents and over 70,000 businesses. It is comprised of the cities of Glendale, Burbank, Calabasas, San Fernando, and Los Angeles. If the Valley was a standalone City it would be the 7th largest in the United States. The Valley serves as home to many leading industries, the best known of these lead the way in aerospace, bio-technology, technology, healthcare, motion pictures, television production, and music recording.
The Valley is home to many of the world’s most recognizable corporate names. They include Fortune 500 Companies such as The Walt Disney Co., Amgen Inc., Health Net Inc., and Avery Dennison Corp., as well as Fortune 1,000 Companies Tutor Perini Corp., Teledyne Technologies Inc., The Ryland Group Inc., and Public Storage. Other major companies located in The Valley include Nestlé USA, Comcast, On Assignment Inc., Yellow Pages, Farmers Insurance, Ixia, REC Solar Inc., Northrop Grumman Navigation Systems, Superior Industries International, DineEquity, Dole Food Company, and the Cheesecake Factory.
The Valley is home to a large number of hospitals and medical centers. More notable ones include Kaiser Permanente Medical Centers, Providence Health Services, Sherman Oaks Hospital, Northridge Hospital Medical Center, and West Hills Hospital Medical Center, a network of Adventist Medical Centers, along with many urgent care, rehabilitation centers, and specialty medicine centers. Within the greater San Fernando Valley area you will also find medical operations of the world-renowned USC and UCLA specializing in advanced research and treatments.
Warner Center is located within the highly desirable western part of the San Fernando Valley market of Los Angeles. The Valley market encompasses some of the most coveted and affluent communities and cities in California, including Calabasas, Woodland Hills, Sherman Oaks, Hidden Hills, Agoura Hills, Burbank, Universal City (an area) and Glendale. The market is home to a diverse employment base comprised of entertainment, media, advertising, new media, telecommunications, hardware, software, publishing companies, healthcare and medical industries, bio-technology, financial, legal and professional services firms.
The Valley is home to the world’s major movie studios. With its entertainment industry known around the world, The Valley is attracting creative talent and major new investors. Well-known entertainment companies in The Valley include The Walt Disney Company, Universal Studios, Pixar Animation Studios, DreamWorks SKG Animation, Warner Bros Studios, Marvel Studios, CBS Studios, NBC Studios, Nickelodeon Studios and Cartoon Network Studios. There is no other place with a stronger infrastructure of media personnel or studio production capabilities.
Tourism is constantly growing in The Valley, with over 42 million overnight and day visitors to the region annually; these visitors spend over $18 billion per year. The Valley is also known for famous places such as Mulholland Drive, Ventura Boulevard, the Hollywood Walk of Fame, Universal Studios & City Walk, the Getty Villa, the Getty Museum, the Nethercutt Museum, Griffith Park, Santa Monica Mountains Conservancy/Park and a multitude of shopping malls. For those seeking outdoor activities, there are hidden gems such as the Japanese Garden, Lake Balboa, Griffith Park Observatory, the Great Wall of LA and Stoney Point Park.
The Valley makes transportation easy and accessible for employees and their families. Anchored by three major airports in the region, the world’s largest general aviation airport in Van Nuys, Bob Hope Airport in Burbank (“BUR”), and Los Angeles International Airport (“LAX”), the Valley provides easy access to major airlines for business, trade, and private aircraft needs. On the ground, The Valley has commuter rail services, dedicated high- speed bus lanes, a subway, an elaborate freeway system, and will have a California High Speed Rail station, now in the planning stage. These methods of transportation provide convenient access to the largest international sea ports in the U.S. - the ports of Los Angeles and Long Beach.
The Valley is home to 121 accredited institutions that offer higher education degrees, and includes public and private universities, colleges, trade schools, and graduate institutions. Some of them include California State University Northridge (“CSUN”), Woodbury University, National University, Pierce College, Mission College, Los Angeles Valley College, Glendale Community College, University of West Los Angeles School of Law, DeVry University, West Valley Occupational, and many more. These institutions and others create an impressive employee base from which companies can draw.
Located across from the site, Westfield Topanga offers world-class shopping with 1.6 million square feet of retail and over 270 stores. Becuase of the earning power of Valley residents, many high-end retailers have established a presence in Westfield Topanga, including Neiman Marcus, Gucci, Cartier, Ferragamo, Burberry, Hugo Boss, Michael Kors, Louis Vuitton, Tiffany & Co., Jimmy Choo, Lacoste, and A|X Armani Exchange.
Recently opened in the fall of 2015 and located across Victory Boulevard from the site, the 550,000 square foot The Village at Westfield features retailers including: Burke Williams, Costco, Crate & Barrel, Fabletics, J.Jill, Johnathan Adler, REI, 24-Hour Fitness, and Sunglass Hut.
Westfield Promenade is a 615,000 square foot shopping center which was substantially renovated in 2001. Located on Topanga Canyon Boulevard, the center features a Macy’s and a 16-screen AMC Theatre as main anchors. Other notable retailers include Restoration Hardware, Talbot’s and Z Gallerie. The mall also contains a selection of fine and casual restaurants with dining options such as Ruby’s Diner, Corner Bakery, Maggiano’s Little Italy, Coffee Bean & Tea Leaf, P.F. Chang’s China Bistro, and Ruth Chris Steak House.
The region surrounding the site is home to over 200 sound stages and studios. All of the major film studios and television networks, as well as most of the larger cable networks, have headquarters and/or major production facilities in the Valley, with several in close proximity to Warner Center. Combined, these businesses have developed an industry infrastructure that supports Los Angeles County’s reputation as the preferred location for media and entertainment companies.
The impact of global entertainment and media industry’s long-term expansion in Los Angeles has a direct and positive impact on economic growth, and subsequently demand for office space and housing, as demonstrated by the following facts:
The Greater Los Angeles Office Market is comprised of approximately 428 million square feet of multi-tenant office space in buildings 15,000 square feet or larger. It ranks as the third largest office market in the nation, followed by New York City and the Greater Washington DC area. Most of its space, 55%, was built post 1985, making it a relatively young market. It is also relatively decentralized, with only 11% of the space located within Downtown Los Angeles and 89% dispersed throughout the region. 40% of the space is in low-rise buildings, followed by 31% in mid-rise buildings and 29% in high-rise structures.
After a somewhat disappointing third quarter of 2015, the Los Angeles office market in the fourth quarter of 2015 regained the momentum lost in the prior quarter as net absorption surged to the high levels seen back in the second quarter of 2015. The uptick in absorption certainly set a positive tone for market sentiment in 2016. With rents returning to pre-recession levels and vacancy rates averaging 11% and trending lower, it is widely thought there is not a whole lot of room left for the type of growth seen up until this point in the market cycle. That being said, business cycles do not die from old age and despite several indicators returning to pre-recession levels, there are few storm clouds on the horizon and office employment growth is projected to drive growth in 2016, like we have seen so far.
The San Fernando Valley office market witnessed strong positive tenant demand with year to date net absorption of 200,039 square feet in the fourth quarter 2015, up from 10,786 year to date in the third quarter, bringing the vacancy rate down to 11.5% from 12.3% in the third quarter. Overall quoted rental rates increased slightly from $2.12 in the third quarter to $2.15 in the fourth quarter.
Class A rental rates in the Woodland Hills/Warner Center area rose meaningfully to $2.32 per square foot in the 4th quarter, compared to $2.20 in the 3rd quarter and the vacancy rate dropped slightly to 14.3% from 14.4% in the third quarter. Notable tenant move-in’s in the fourth quarter included Viking River Cruises moving into 32,700 square feet and Essex into 20,100 square feet, both in Woodland Hills/Warner Center.
Large development sites in “Gateway Markets” like Warner Center are unique to say the least and thus high on, if not at the top of, the institutional investor list. The development risk profile of such a large project is reduced as it provides an economy of scale development opportunity in a densely populated proven marketplace that is under served. It is because of this investor rationale and the unmet need for residential units in Southern California and Los Angeles, particularly, that multifamily capital is seeking such opportunities.
According to UCLA Ziman School of Real Estate, nationally both single- and multifamily are poised to approach the long-term average (1959–2014) of just under 1.5 million units in 2016. They forecast housing starts of 1.14 million units for 2015 and 1.42 million units and 1.44 million units in 2016 and 2017, respectively. This level of activity is well above 1 million units recorded in 2014 and the 2009 low of 550,000 units. This activity is far from the mid-2000s’ boom level of above 2 million units a year, but it will yield some compelling new trends in the coming year. The flipside of the decline in homeownership is the rise in renting. Multifamily starts, which bottomed out in 2009 at 112,000 units, will exceed 400,000 units this year and average 460,000 units over the next two years. The boom is underpinned by rents increasing at a rate of 3.5 percent a year in the official data, but according to the publicly traded apartment real estate investment trusts, rents are increasing on the order of 4.5 to 5.0 percent. The official data tend to lag the actual marketplace because of the prevalence of rent-controlled jurisdictions in the official sample.