Regency Realty Is Mounting Retail Offensive in L.A.

QUIETLY but steadily, Florida-based Regency Realty Corp. has expanded its development program in the Los Angeles area.

The real estate investment trust now has 2 million square feet of retail development in the pipeline in Southern California.

Since last December, the firm has closed escrow on 16 properties in the market and has another 13 in some form of pre-development, most in L.A. County. The 16 properties already purchased are valued at a combined $290 million.

For 2000, nearly half of Regency Realty's $614 million development program has been handled from its L.A. offices, said Brian Smith, managing director of investments for Regency's West Coast operations.

Regency concentrates its holdings in grocery store-anchored shopping centers but has taken to developing smaller parcels and selling them off. Its largest project is a 400,000-square-foot, $45 million retail center under construction in Fullerton. In L.A., the largest is the $27 million San Fernando Value Square in San Fernando, a 230,000-square-foot site anchored by a Home Depot and Sam's Club. The project, which is now under construction, attracted protests earlier this year from vendors who for years have sold their wares at a swap meet on the property.

Other projects include the $12.2 million, 110,000-square-foot expansion of Garden Village Shopping Center in San Pedro; a $10.5 million project in Torrance; and the $10.1 million expansion of Long Beach Corporate Square.

Dot-Corn Safeguards

Landlords may be a bit leery of signing tech tenants right now, but conservative leasing practices coupled with plenty of cash commitments among some dot-coms mean that landlords are not taking many major hits, at least at the moment.

The prime example is eToys, which occupies 151,000 square feet in the first phase of Kilroy Realty Corp.'s Westside Media Center. This month, eToys announced that sales for the quarter would fall far short of previous estimates.

That's not good news for eToys or any e-tailer during the holiday season. But whatever happens, Kilroy says, it has the kind of assurance that owners have been demanding from dot-coms.

That's because eToys posted a $15 million letter of credit when it signed the lease, which should give Kilroy a 30-month cushion to find a new tenant if need be, noted analyst Craig Silvers of Sutro & Co., who follows Kilroy and recently reiterated a "buy" rating for the stock.

Silvers also recently gave Arden Realty Inc. a "buy" rating, despite the loss of some dot-coin tenants at its properties, noting that the trust has kept its exposure to tech tenants to a minimum.

Playa Play-by-Play

As expected, Playa Capital Co. and MaguirePartners have announced that MaguirePartners is developing the commercial portion of the Fountain Park parcel in Playa Vista.

Hines was reportedly lined up to buy the property from Plnya Capital when Robert F. Maguire III, who was once the lead developer on Playa Vista, forced Playa Capital into arbitration earlier this year.

The 426,000-square-foot office project to be undertaken by MaguirePartners at Fountain Park is just one part of the overall work the firm plans to undertake in partnership with Equity Office Properties Trust. The first phase of the two-building project is scheduled for completion by the start of 2002 and has been dubbed Water's Edge.

Several years ago, Maguire was controlling partner of the Playa Vista project but lost much of his influence after banks initiated foreclosure. He still retains a minority stake and held on to the rights to develop, manage and lease the commercial portion of the 120-acre first phase of the project, which is planned to eventually contain 3.6 million square feet of office and retail space.

Aside from Fountain Park, which is designed to also include apartments and a visitors' center, the remainder of the first phase of Playa Vista is still awaiting approvals for bond money from a city of L.A. budget committee, which held off until it could consider additional environmental concerns raised by opponents of the project.

Forecast Season

Next year should be a pivotal one in L.A. real estate. Or will it? Depends on who's behind the forecast, and there are plenty to choose from.

On Jan. 9, there's the southern California Development Forum's 11th annual forecast at the Sheraton Universal Hotel. Speakers will include Rocky Delgadillo, deputy mayor for economic development in L.A. and a candidate for city attorney, and Larry Kosmont of Kosmont Partners. State Controller Kathleen Connell, a candidate for L.A. mayor, also has been invited to speak. For information call [phone].

The Institute of Real Estate Management will hold its forecast on Jan. 12 at the Hotel Inter-Continental. "Los Angeles 2000 & Beyond: Considering the Past, Looking to the Future" will feature Mayor Richard Riordan, mayoral candidate Steve Soboroff of Soboroff Partners, and Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles.

Other speakers include Bob Baker, vice president of leasing for Madison Marquette, Steve Bay, executive managing director at Insignia/ISG, Ken Carey, first vice president of CB Richard Ellis, and Greg Garmon, regional vice president of ALMCO.

A week later, on Jan. 19, the Real Estate Conference Group stages its 2001 Real Estate Outlook at the Century Plaza Hotel. Timothy Callahan, president and CEO of Equity Office Properties Trust, will be keynote speaker.

Other speakers include K. Dane Brooksher, chairman and CEO of ProLogis; Ric Campo, chairman and CEO of Camden Property Trust; Glenn L. Carpenter, chairman and CEO of Pacific Gulf Properties Inc.; Victor Coleman, president of Arden Realty Inc.; and David J. Contis, executive vice president and chief operating officer of The Macerich Co. For information call [phone].

On Feb. 15, the UCLA Extension-Los Angeles Times 2001 Real Estate Forecast will be held at the Beverly Hills Hotel. Speakers will include state Treasurer Philip Angelides; Alison Lynn Reaser, a former consultant to Federal Reserve Chairman Alan Greenspan and chief economist and senior market strategist for Banc of America Capital Management Inc.; Mitchell Pleis, director of corporate development for Cypress Communications and former director of real estate for the California State Teachers Retirement System; Barry Leibert, a partner at Arthur Andersen LLP; and Roger Vincent, commercial real estate editor for the Los Angeles Times.