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Tuesday, Nov 28, 2023


By WADE DANIELS Staff Reporter This was the year that the Valley finally buried the earthquake, once and for all. After years of lingering economic aftershocks from the 1994 Northridge quake, employment was up, office and industrial vacancy rates were down, and new construction got underway. And in a development that’s probably as important psychologically as it is economically, Valley home prices headed up again after a seven-year slump. “This has been the strongest year for the real estate industry since its peak of 1989,” said Jim Link, vice president of the Southland Regional Association of Realtors. Overall, the “the Valley has seen excellent growth this year in many areas compared to last year,” said Marvin Selter, chair of the Valley Industry & Commerce Association. Specifically, 1997 was the year that: – The price of the median single-family home in the Valley rose to $229,800 in October up from $213,300 for the like period a year earlier. There were 1,027 homes sold in October, compared with 815 a year earlier. Prices are still far below the peak of $305,500 reached in October 1989, but Link and other real estate experts say the long slide is over. – Apartments became a hot investment. At least 650 Valley apartment buildings were projected to be sold by year’s end, a rise of 17 percent over 1996, according to Hanes Investment Realty Inc., a Westlake Village-based brokerage. – Jobs increased. Valley private-sector employment for the first quarter, the latest figures available, totalled 589,922, about 23,000 more than for the same quarter in 1996, according to the California Employment Development Department. These numbers represent “slow, moderate growth” in employment and in the broader economy, according to Shirley Svorny, director of the Center for the Study of the San Fernando Valley Economy at Cal State Northridge. Service jobs saw the strongest growth in the first quarter. They totalled 268,109, up 28,033 from the year-ago previous period. Manufacturing fell by 3,287 jobs, to 87,172. – Office vacancies tightened slightly. The vacancy rate was 12.5 percent in the third quarter, down from 13.2 percent in the like period a year ago. Industrial vacancy rates dropped to 5.1 percent in the third quarter, down from 6.1 percent a year earlier. – The third quarter saw ground broken on L.A. County’s first major speculative office building in over five years as PacTen Partners and Morgan Stanley & Co. started work on a 500,000-square-foot building in Glendale. Meanwhile, looking to capitalize on the demand for space in the Media District, J.H. Snyder Co. got to work on a six-story, 585,000-square-foot building near the NBC studio lot in Burbank. The Valley’s entertainment industry was cited as key to the area’s growth. “The entertainment industry grew dramatically this year,” Selter said. “Not only in terms of the big studios but in terms of the ancillary businesses.” Illustrating the growth of small businesses this year, he noted that Chapter 7 bankruptcy filings were up by 11.9 percent, to 1,137 through October. Why do bankruptcy filings mean more small business? “When you have more small entrepreneurial companies, there are more failures,” he said. While employment figures for manufacturing were down, economists said the Valley’s aerospace industry is rebounding. Seattle-based Boeing Co.’s thirst for parts and services was a positive influence for thousands of small businesses, said David Goodreau, chairman of the Southern California Small Manufacturers Association. One of these was Newman Machine Works in Burbank, of which Goodreau is president. The company makes latches and other door components for jets and saw its revenues double from 1996 and triple from 1995, he said. There also was a turnaround in the retail sector, with numerous projects seeing stronger interest than in years past. One example is the 200,000-square-foot Granada Hills Town Center. The J.H. Snyder Co. project was more than 90 percent leased by the time tenants started opening their doors in October. “(Retail) has definitely pulled out of the recession that was so long-lasting,” said Allen Young, senior vice president at CB Commercial Real Estate Group. The Valley’s hotel industry is largely reliant on commercial rather than tourist business, and saw healthy increases. Occupancy rates through September were up by 3.8 percent to 76.96 percent, according to the Los Angeles-based PKF Consulting. Nightly room rates through September were also up by 7.2 percent to $76.83. One area was not rated as entirely healthy. There was an increase in inbound air cargo through September at the Burbank Airport of 35.7 percent, to 2.7 million pounds. However, there was a 5.4 percent drop in outbound cargo, to 3.5 million pounds. “We are concerned about the problems in Asia and how they are and will be affecting Valley exports,” said John Rooney, president of the Valley Economic Development Center.

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