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Thursday, Mar 28, 2024

Office Market in Downturn as Industrial Stays Stable

Colliers released its second quarter reports for the office and industrial markets in the San Fernando Valley and Ventura County. You probably will not be surprised to hear that the office sector is faring badly while the industrial market is pretty much stable. Santa Clarita is particularly hurting with an office vacancy rate nearing 23 percent, up 34 percent from the first quarter and a whopping 60 percent from the same period in 2007. That was partly exacerbated by the completion of the 144,000-square-foot Summit Oaks project in Valencia. On the other end of the spectrum, Warner Center’s vacancy rate is still in single digits, at 7.3 percent. That’s still a huge increase over the year; specifically, a 192 percent rise from the 2.5 percent vacancy rate of 2007’s second quarter. A contributing factor was the delivery of the last building in LNR’s Warner Center project which added another 255,000 square feet to inventory. Colliers reports that rental rates are starting to come down, albeit only by a penny per square foot. With more than 685,000 square feet of office product scheduled to come online within the next two quarters, there’s little chance the downward trend in rental rates won’t continue for some time. On the industrial side, vacancy rates ticked up almost imperceptibly and rental rates stayed stable. Leasing and sales activity have slowed to a crawl, attributed by Colliers to the overall uncertainty about the general state of the economy. It’s a Busy IREA Encino-based Investment Real Estate Associates announced it facilitated the sale of the College Greens Shopping Center in Sacramento for $19.8 million. Chris Thompson, senior vice president of IREA, brokered the transaction between an undisclosed individual and the seller, Kaufman Bloomfield Properties-DE, LLC. The community center is anchored by a Raley’s grocery store and a 99 Cent Only store. Other tenants include Starbucks, Subway and Hollywood Video. In other IREA news, Vice President Warren Berzack facilitated the purchase of the Ontario Mills Jack-in-the-Box for an undisclosed buyer. GE Capital Solutions was the self-represented seller in the $2.3 million deal. Back in the city, Berzack and fellow IREA broker Slavic Zlatkin represented both buyer and seller of a 12-unit apartment building on Highland Avenue, between Sunset and Santa Monica boulevards for $1.7 million. Just a few miles away, in West Hollywood, IREA brokers Morgan McMullin and Clark Everitt were handling another apartment building transaction. Sale price for the 56-unit Hollywood Continental apartment building constructed in the 1940s was $9.4 million. Not Finished, Just Downsizing Manufacturer Vibra Finish has found a new, smaller home in Simi Valley. “We’re downsizing,” said Haskell Hall, president of Vibra Finish. “We’re moving most of our manufacturing to Ohio now.” The company sold its 41,536-square-foot industrial building in Sylmar back in April with the help of Daum broker Mike LaRoque who also represented the company in the purchase of its new 22,840-square-foot building in Simi. John DeGrinis and Patrick DuRoss of Colliers took care of the seller’s end of the transaction which was valued at $2.9 million. Get Ready for More Condos Woodman Sylvan Properties, Inc., an entity of DePauw Construction of Studio City, purchased a fully-entitled 14,500-square-foot vacant lot in Toluca Lake for $1.8 million in an all-cash deal. The firm hopes to complete construction of a 15-unit luxury condominium project within the year. They have not yet determined whether the condos will be for sale or for rent yet, according to a prepared statement. The sale price equates to $127 per square foot of land which translates into a cost of $123,333 per unit before any construction takes place. It took the sellers, developer Hugh Finkle, engineer Eric Lieberman and architect Stanley Brent more than two years to receive the necessary approvals to entitle the land. The transaction was negotiated by Brian Loring of the Pasadena office of Hendricks & Partners on behalf of the seller. Spa Day The Village at Moorpark welcomes new tenant, Bella A’More Day Spa and Salon to the 130,000-square-foot shopping center. The Spa/Salon leased 7,288 square feet with the assistance of Paul Capra of Lee & Associates-LA North/Ventura, Inc. Total consideration for the 10-year lease is approximately $2 million. This will be the second location for Bella A’More. The spa’s original facility is in Simi Valley. A Sale and a Lease Lee & Associates principal Ron Feder announced two transactions: Rezbong California LLC purchased a 4,000-square-foot industrial condominium in the Wilson Business Park of Chatsworth for $800,000, and a 3,896-square-foot office lease in Canoga Park to WW Media Inc. Correction The Sunkist building in Sherman Oaks has not been formally listed for sale as reported in our last issue, per a company spokesperson. Staff Reporter Linda Coburn can be reached at (818) 316-3123 or at [email protected].

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