Sales and leasing activity in the Valley, especially in the newer Warner Center submarket about 20 miles northwest of Downtown LA, has heated up recently even as many other areas continue to slow. One key reason: Unlike LA's Westside or San Francisco's SOMA, the Valley never became an overwhelming favorite of the dot-com crowd and therefore isn't suffering much from the tech wreck.

"The Valley's economy is more diversified than a lot of other places. It has insurers, health-care companies, financial-services companies and the like," says Marc Spellman, a Colliers Seeley International broker who has put together some of the area's biggest deals over the past few years. Those were the kinds of credit tenants most landlords and developers cherished before the dot-com boom began, brokers say, and now they're being sought again as owners look for tenants with more stability.

In fact, says Spellman, the San Fernando Valley is among the relatively few California markets where vacancies have been declining: The class A and B vacancy factor in Warner Center and the surrounding area has dropped from 11% at the start of the year to about 10.5% today. "That's a pretty good figure, especially when you compare it to the 15% or even 20% rate places like the Westside or Downtown LA have after their sublet space is factored in," Spellman tells GlobeSt.com.

Meantime, most of the relatively small amount of new space coming online has already been leased. The 356,000-sf, $100-million first phase of Lennar Partners' LNR Warner Center office complex is just now being finished but there's only 23,000 sf of space still available to rent, says Spellman, who is marketing the project with Colliers Seeley colleague John Sabourin. Interest is also strong in the 92,000-sf second phase, Spellman adds, even though construction won't begin for at least several more weeks.

Investors have taken note. In the past 48 hours alone, LA-based Bentley Forbes announced that it has paid an affiliate of LA-based Tishman International Cos. $120 million for Warner Center's 517,638-sf 21st Century Plaza, while international real estate conglomerate Grosvenor said it is buying the 252,973-sf Warner Corporate Center office complex nearby from privately held Nomura Warner Center Associates LP for $40 million.

An even bigger sale could be announced soon. Boston-based AEW Capital Management recently hired LA-based Secured Capital Corp. to market the 2.3-million-sf Warner Center Properties portfolio on behalf of AEW client Alaska Permanent Fund Corp., and brokers say that Chicago-based Equity Office Properties and Santa Monica-based Douglas Emmett Co. are among the list of potential buyers.

"I wouldn't be surprised if the portfolio sells for $450 million, or maybe even a half-billion dollars," broker Spellman says. "With that kind of price tag, the buyer has to be a pretty heavy hitter."