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JOYZELLE DAVIS
After every corporate merger and cutback announcement, the first thing people want to know is, What happens to the employees? Then they want to know about the real estate.
H.F. Ahmanson & Co., which acquired Coast Savings Financial earlier this month, announced last week that it is selling Coast’s 30-acre campus in West Hills. Ahmanson, the corporate parent of Home Savings, hired the commercial brokerage firm Cushman & Wakefield to market the 380,000-square-foot office property in the West San Fernando Valley.
This is the next chapter in the storied history of the 40-year-old office park. It was initially developed as a research and development site for an electronics firm, then sold in 1966 to Hughes Electronics Corp. for use as administrative offices for its missile systems operations.
Hughes sold the property about 20 years ago to Coast Savings and the Valley Jobs Recovery Agency, Mayor Richard Riordan’s economic development committee. That ownership group spun off portions of the then-88-acre site, selling 20 acres to the DeVry Institute, five acres to the Los Angeles Police Department and 33 acres to a development partnership between Regent Properties and Shamrock Holdings, which are developing the West Hills Corporate Village office park.
Now the property is down to its final 30 acres, on which five office buildings and four “common area” buildings, such as a cafeteria and theater/conference room, are located.
Cushman & Wakefield has not yet begun its marketing effort, according to Mike DeSantis, one of the brokers handling the deal. He declined to discuss Home Savings’ asking price for the property.
Home Savings will soon have even more real estate to vacate. The Irwindale-based savings & loan agreed earlier this month to be bought by Seattle-based Washington Mutual Inc.
Home Savings will most likely be vacating its Irwindale campus, since Washington Mutual plans to continue operating from Great Western’s former headquarters in Chatsworth. Home Savings leases the 775,000-square-foot Irwindale facility on a 43-acre campus, so Washington Mutual will have to either find a way out of the lease or sublease the property to another tenant.
The WaMu acquisition is also expected to result in the closure of 170 Home Savings branches across California, some of which Home Savings owns and others which it leases, according to Mary Trigg, a spokeswoman for Ahmanson. Those real estate decisions won’t be finalized until WaMu’s acquisition closes, which is expected to occur in the third quarter, she said.
Another major owner of Los Angeles real estate, Boeing Co., announced earlier this month that it will be scaling back its Southern California operations over the next two years.
The defense arm of the company plans to put portions of its Downey, Monrovia and Palmdale facilities up for sale, according to George Torres, a spokesman for Boeing.
At its Monrovia plant, which the company announced it will close by the year 2000, the company plans to sell the 230,000-square-foot industrial building on Royal Oak Avenue and terminate a lease on the facility on Shamrock Avenue. In Palmdale, the company plans to sell about 1 million square feet of aircraft-related property, Torres said.
Most of the Downey property where Boeing operates is owned by the federal government. Of the Boeing-owned land in Downey, the company already has 20 acres (including a 225,000-square-foot industrial structure) in escrow, he said.
The federal government declared 67 acres of its Downey land, mostly surface parking lots, as surplus property years ago. The city of Downey is currently negotiating to purchase that parcel, located near the intersection of Lakewood Boulevard and Imperial Highway. It plans to develop a business park on the site, according to Lee Powell, assistant city manager for Downey.
Another 60 acres of government land in Downey also will be coming up for sale, Torres said. The property, located immediately southwest of the parcel the city is now negotiating to buy, houses 1.1 million square feet of World War II-era office and industrial buildings.
Boeing has not made any announcements yet on its Long Beach facilities, where its work force will be reduced by one-third over the next 18 months. Don Hansen, a Boeing spokesman, said the company is in the process of evaluating its land there.
South Bay action
El Segundo-based Infonet Services Corp. just signed a $35 million, 12-year lease for a 160,000-square-foot build-to-suit facility that Kearny Real Estate Co. will develop.
Infonet currently leases about 98,000 square feet at a building adjacent to Kearny’s Grand Avenue Corporate Center, where Infonet’s new headquarters is to be built.
Kearny, a wholly owned venture of the Morgan Stanley Real Estate Funds, has already gotten a commitment from Hilton Hotels and Resorts Inc. for a 3.5-acre site at its 23-acre business park. The Los Angeles Lakers basketball team and Los Angeles Kings hockey team also plan to build their practice facility there.
Kearny expects to break ground on the three-story Infonet building this fall, and plans to build a 105,000-square-foot speculative building opposite the Infonet headquarters.
Drive-in transformation
Two idle drive-in theater lots in Long Beach are about to see some action again. Pacific Theatres Realty plans to build two separate retail centers on the site of its shuttered screens.
Pacific intends to build a 43-acre “power” retail center on the former home of the Los Altos Drive-In at Bellflower Boulevard and Spring Street in east Long Beach. The center is 98 percent leased, with K-Mart Stores, Cal Worthington Ford, Beach City Chevrolet and the home improvement retailer Eagle Hardware & Garden Inc. as anchor tenants.
The project is working through the city’s building approval phase and should break ground by this summer, according to Neil Haltrecht, vice president of real estate for Pacific Theatres Realty.
Just a bit north of that project, the company plans to build a Ralphs-anchored retail center on the site of the former Lakewood Drive-In Theater. That 120,000-square-foot project, located at the corner of Cherry Avenue and Carson Street, already has its building approvals and should break ground next month, Haltrecht said.
The Los Angeles-based theater owner formed its real estate division in the early 1990s to develop the sites of its former drive-in theaters.
Staff reporter Joyzelle Davis covers the real estate industry for the Los Angeles Business Journal.
