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Thursday, Mar 28, 2024

Low-Vacancy Market Awaits Valencia Project

The industrial market in the Santa Clarita Valley is about to get a little bit wider. Developers AEW Capital Management LP, a Boston, Mass.-based real estate investment advisor, and Sheridan Ebbert Development in Sylmar just broke ground on three Class A industrial buildings on a 13-acre industrial site in Valencia known as the Valencia Gateway V. When the buildings are finished in the first quarter of 2017, they will bring almost 255,000 square feet of manufacturing, assembly, distribution and warehouse space into a desperately tight market. The buildings sit along Hancock Parkway within the 1,200-acre Valencia Commerce Center, the largest master-planned industrial project in L.A. County. Craig Peters and Doug Sonderegger, both executive vice presidents at L.A.-based CBRE Group Inc. are handling both leasing and sales for the properties. Construction started last week. One of the buildings, the 60,923-square-foot Building 9 at 27909 Hancock Parkway, will be a state-of-the-art industrial building with 28-foot minimum clear height for stacking product vertically, an Early Suppression Fast Response Fire Sprinkler Systems for high-piled warehouse goods and truck-high and ground-level loading for the largest trucks allowed on state highways, Peters said. “We’re in desperate need for additional supply,” Peters said. “We already have lots of demand – from both local companies and those from the San Fernando Valley looking for space at a time when there’s less than 1 percent vacancy. These buildings will fill part of the need, but the demand will far exceed the supply when these buildings come on line.” The Santa Clarita Valley is starting to come into its own as a market for institutional investors, Peters said. “Five years ago, the area was considered a core-plus market – core meaning it’s an area where everybody wants to invest in, and plus meaning it’s up and coming,” Peters said. “Now, it’s a core market.” Buildings the type to be built are selling for $140 to $150 a square foot, Peters said, up about 6 to 10 percent from the same time last year and fed by a supply-and-demand imbalance and very low interest rates. The even tighter San Fernando Valley market is driving businesses north to the Santa Clarita Valley, he added, and lease rates at the new site will probably be between 5 cents to 10 cents a square foot less than in the San Fernando Valley. During the first quarter, industrial leases averaged 90 cents a square foot in the central San Fernando Valley and 73 cents in the west Valley, according to Colliers International. The average for Santa Clarita was 64 cents. Institutional Advisors Coldwell Banker Commercial Advisors, a Salt Lake City-based national network of 17 Coldwell Banker franchises, is expanding into Northwest Los Angeles and has opened a full-service brokerage in Woodland Hills, hiring Lee Black, former executive managing director of Cushman Wakefield’s L.A. area business, as managing principal. Black’s goal is to grow the office as part of a national corporate services network because of his background representing national institutional and corporate clients, said Lew Cramer, the company’s chief executive. “We draft the player and not the position; and Lee is such a talent,” Cramer said. The Valley and L.A.’s northwest region are growing in the three segments where CBC Advisors handle sales and leases – industrial, retail and land, Cramer said. Black’s office will handle brokerage services and property and asset management but the focus is on corporate services for large companies that want national support, Cramer said. “In today’s commercial real estate world, you need scale and scope in order to compete for institutional investors,” he said. “If you’re dealing with large clients, they want to make sure you can handle their requirements.” Family Brokerage Chicago-based commercial real estate brokerage Jones Lang LaSalle Inc. has hired a father and son team at its Burbank office to handle office leasing for the Los Angeles North region, which includes the San Fernando Valley, Santa Clarita and Ventura County. Twenty-year industry veteran Richard Bright has joined as executive vice president. His son, Ryan Bright, has been named vice president. They’ll negotiate office leases for tenants looking to expand into the region as well as building owners locally, regionally and nationally, according to Jones. Both worked previously for CBRE. The office has seven brokers but needed the additional help, said Tony Morales, Jones’ executive managing director, particularly from industry veterans. Peter Belisle, market director for Jones’ southwest region, said the firm is looking to grow in strategic submarkets, such as those covered by the local office. “It increases JLL’s presence by adding two brokers with great reputations and who allow us to broaden our expertise further north in the Valley,” Belisle said. Staff Reporter Carol Lawrence can be reached at (818) 316-3123 or [email protected].

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