Demand for Santa Clarita Valley commercial real estate was relatively high in the first quarter, mostly because of a lack of inventory in the submarket. Bidding wars for the limited supply were not uncommon, leading to increases in leasing and sale prices, brokers said. Gerald and Pamela Pelton Family Trust of Santa Barbara purchased a total of 48,848 square feet of industrial space in Valencia at 25327 Avenue Stanford. The two-property portfolio was purchased from Pacifica Company of Tarzana for $6 million. Mateo Industrial Investments of Los Angeles purchased a 25,965-square-foot Valencia industrial building at 29170 Avenue Penn for nearly $1.9 million, or $72 a square foot, from Penn Industrial Partners of Valencia. Daryl Parker purchased a 16,763-square-foot Valencia industrial building at 25334 Avenue Stanford for $2 million from Colin and Annie Seow. The buyer’s brokers as well as the listing brokers were Yair Haimoff and Matt Sreden of NAI Capital of Santa Clarita. Tarnik Inc. of Valencia leased 42,960 square feet of industrial space at 24700-24730 Avenue Rockefeller in Valencia from Bristol Group Inc. of San Francisco. Craig Peters of CBRE in Glendale helped broker both sides of the transaction. Rexford Industrial Realty Inc. of Los Angeles purchased a 134,287-square-foot Valencia industrial building at 28454 Livingston Ave., which is part of Livingston Technology Park, for $16 million from Flextronics International of Valencia. The office vacancy rate fell to 14.6 percent from 15.1 percent during the previous quarter, according to data provided by Colliers International. Tenants absorbed 9,600 square feet of office space in a market with more than 2 million square feet. “Inventory is really tight,” said Robert Stratton of Stratton Industrial/Commercial Real Estate Services Inc. in Santa Clarita. “There are not a lot of properties out there. And investments are tough, because there is no real return. Prices are too high.” Office space in the Santa Clarita Valley was selling for around $300 a square foot, according to Craig Peters of CBRE’s Glendale office. As for rents, landlords were charging a weighted average of around $2.30 a square foot during the quarter, which was on par with San Fernando Valley prices and 16 cents more than in the Conejo Valley, according to Colliers. “Lease rates for both office and industrial have jumped up considerably over the past 12 months,” said Peters. “A Class-A 10,000-square-foot office suite would lease in the mid-$2.80s full-service gross today.” As for the industrial market in the first quarter, 286,700 square feet of industrial space sold or leased out of the more than 18.5 million square-foot submarket, according to Colliers. Vacancies dropped to a record-low 1.5 percent from 4.3 percent a year ago. The average weighted asking rent during the quarter was 64 cents, which is 3 cents higher than in the San Fernando Valley but significantly lower than the going rate of 79 cents in the Conejo Valley, according to Colliers. In terms of sales, Yair Haimoff of NAI Capital in Santa Clarita said industrial units can cost anywhere from $120 to $225 a square foot, depending on size. He said the people buying industrial are a mix between investors and owner-users, all competing for limited supply. One of the bigger industrial deals of the quarter was a $16 million purchase by L.A.’s Rexford Industrial Realty Inc. of a 134,287-square-foot Valencia building. The seller was Flextronics International of Valencia. The building is located at 28454 Livingston Ave. “We need more product,” said Haimoff. “I think developers are proceeding with developments, but they are taking their time. They are probably studying the market as to not flood it with inventory.” Two industrial projects are set to break ground in the second quarter, said CBRE’s Peters. The IAC Commerce Center, a 1.3 million-square-foot, nine-building business park, will begin construction in Valencia. In addition, land development for the Valencia Gateway V has been completed, and building construction is scheduled to commence in May. “The global capital influx into Southern California is having a very positive impact in the Santa Clarita Valley,” said Peters. “Institutional investor interest in the area continues to increase as evidenced by several recent significant transactions.” – Stephanie Henkel
