20th Century ends saga of HQ search - by staying put.

Insurer signs 5-year lease to remain in Warner Center

In one of the biggest office lease transactions in San Fernando Valley history, 20th Century Industries Inc. has renewed its commitment to its crowded, quake-damaged Warner Center headquarters building through the end of the 20th century.

The big auto and property insurer signed a five-year renewal at its 230,200-square-foot home-office building, at 6301 Owensmouth Ave. in Woodland Hills. No financial details were revealed, but real estate sources estimated the transaction's value at a minimum of $17 million.

The move comes in the wake of a "build-to-suit" deal gone awry, devastating damage from the Northridge earthquake, and fast-tracked discussions over a potential relocation to the region's biggest empty office tower, Warner Center Plaza III tower.

Perhaps most surprising to local real estate brokers, it also followed an announcement that insurance giant American International Group plans to infuse capital into 20th Century -- and possibly take its thriving auto insurance business national. (The Woodland Hills-based insurer has been shaken by financial after-shocks from the Jan. 17 Northridge earthquake in the form of more than $800 million losses on coverage.)

"It's rare that a tenant of 20th's size would make a major real estate deal while the company is in play," commented Seth Dudley, a veteran broker with Julien J. Studley Inc.

The headquarters decision had been put "on hold" indefinitely before the pending AIG infusion was announced. Brokers subsequently speculated that the hoped-for infusion and possible expansion would rekindle talks on moving to the empty Warner Center Plaza III tower.

But 20th's top brass opted to renew at the Owensmouth building even as discussions with AIG continued.

"We've obviously been dealing with lots of other pressing matters, so it's nice to have this one out of the way," said 20th Century spokesman Rick Hill in confirming the renewal agreement with the insurer's longtime landlords, which include Metropolitan Life Insurance Co., partners in the former Tishman West Cos. operation, and Center-Mark Properties Inc.

Hill also suggested the firm would seek additional space, if necessary, after any capital infusion plan is implemented and future growth can be projected.

Assuming the company is able to "determine an expected normal growth pattern" after the AIG deal goes through, such a transaction "would put us more on track for needing space in the not-too-distant future," Hill stated.

The firm has expanded from the original four floors it took in the early 1980s at the 11-story headquarters building, also known as the Tishman Warner Center building. It currently occupies that entire building as well as three other offices in Woodland Hills.

To accommodate projected growth, the "good driver" insurer agreed in April 1993 to lease the first 408,000-square-foot phase of the planned Warner Ridge office campus a few blocks east of 20th Century's current home.

But the insurer terminated that 20-year deal the first week of this year when developers didn't meet a deadline for securing the "build-to-suit" project's construction financing.

As the year's first quarter unfolded, 20th Century was reportedly negotiating to consolidate its headquarters operations -- and provide for future expansion -- by leasing well over 500,000 square feet at the 3-year-old Warner Center Plaza III tower. But the headquarters decision was put on hold as the earthquake's toll on the company's financial condition kept mounting.

So 20th Century's brokers, Jim Travers and George Katunich of Travers Realty Corp., quietly came to terms on a renewal deal with the headquarters building's owners.

Alan Levy and Harvey Mahler, two of the former Tishman West partners, negotiated the deal for the landlords.

Hill also noted the Travers team renewed or extended leases at the three smaller Woodland Hills area offices for another five years.

Levy noted that although half the glass in the headquarters building broke during the earthquake, 20th Century was back in operation within a week after setting up temporary shop in the parking lot. While there was no visible structural damage, Levy said ultrasonic inspections have revealed some cracking in the steel "moment-frame" joints -- a phenomenon many similar structures experienced.

Once the Los Angeles City Council passes a pending steel-frame earthquake-damage inspection ordinance and possible new seismic retrofitting regulations, the owners will comply with the programs, Levy added.

Meanwhile, securities brokerage PaineWebber recently became Warner Center Plaza III's first tenant, leasing about 11,500 square feet on the 25-story building's ground floor. Dudley noted that the tower's leasing team controls the bulk of the western valley's available "Class A" office space and will likely focus on one- and two-floor leases -- including deals with tenants that had been "bumped out" by the would-be 20th Century mega-lease.

And if 20th Century recovers and expands as the 21st century nears, Levy noted his team has a development site adjacent to the historic headquarters. "Hopefully, we'll build another building for them," he said.