NORTH HOLLYWOOD — Los Angeles officials, who have watched for years as North Hollywood maintained a stubbornly high office vacancy rate, hope that redevelopment plans for the area will alleviate the highest vacancy rate in the east San Fernando Valley.
A recent study of the East Valley by Charles Dunn Co. puts the direct vacancy rate for office space in North Hollywood at 15.93% for the fourth quarter of 1998. That's more than three times the vacancy rate of neighboring Burbank.
That's nothing new, one expert said.
"Historically, North Hollywood has been in the 14% to 16% range, for at least the past five years," said Myles Helm, an executive vice president in the Woodland Hills office of Charles Dunn. "So that 16% is not a major surprise."
Helm said that traditionally, the area has lacked the commercial amenities--an abundance of nice restaurants, banks, stores--to attract large numbers of office tenants.
That's expected to change, he said, as Los Angeles moves forward with plans to redevelop the area around the Metro Red Line subway stop.
On March 18, the Community Redevelopment Agency board will consider entering into an agreement to negotiate exclusively with Santa Monica developer J. Allen Radford and his partners, who have proposed building a $750-million movie studio and commercial complex next to the North Hollywood subway station.
Real estate and redevelopment experts predict that even though the new development would create still more office space, it will ultimately attract enough new tenants to the area to drive down that 16% figure.
"Where are we going to get those tenants? We're going to steal them from Burbank and Glendale, quite frankly," predicted the CRA's Walter Beaumont.
"Space is going to be cheaper here, certainly cheaper than Burbank."
While boasting of the success of the CRA's two office projects in North Hollywood--the former Hewlett Packard building and the Academy of Television Arts & Sciences--Beaumont acknowledged that the community's office stock is a mixed bag.
"We don't have a large office product mix here," he said. "Some are OK, some are nice and some are just awful."
Both experts acknowledged that some existing North Hollywood buildings may not be able to compete with the new properties.
But ultimately, both said, the energy generated by the redevelopment project should cause more than a few tenants to warm to the area.
"Any time there's a project that can bring excitement into an area, it's a good thing," Helm said.