Market Seen Softening for Warehouse Properties Real Estate by Shelly Garcia The industrial sector, a stalwart of the greater San Fernando Valley real estate market, has softened considerably in the first quarter of the year. Overall, industrial vacancies for the Valley increased to 4.8 percent in the first quarter of the year, up from 3.8 percent in the same period last year, according to data from Cushman & Wakefield. In the warehouse and distribution sector, the increase was even more dramatic. Vacancies rose to 5.6 percent in the period, compared to 2.6 percent for the first quarter of 2001. In that sector, the softening represents a continuation of a trend begun earlier. For the fourth quarter of last year, vacancies rose to 5 percent, compared to 4.5 percent for the same period a year earlier. Overall, however, industrial vacancies had tightened at year’s end, down to 4.3 percent from 4.7 percent in the last quarter of 2000. Despite the uptick, vacancy levels in Cushman’s North L.A. region, which includes the San Fernando and Santa Clarita valleys as well as Ventura County, remain low. Brokers and developers generally consider vacancy rates in single digits to mean that demand for properties remains high. And the softening is not translating directly to rental rates, Cushman & Wakefield said. For the fourth quarter of 2001, rental rates for warehouse and distribution properties averaged $0.61 per square foot, compared to $0.56 per square foot in the fourth quarter of 2000. Simi Valley Lease Milgard Windows has signed a 10-year lease to occupy the former Bugle Boy facility in Simi Valley. Milgard, which is doubling the size of its operation with the move, has inked a deal for 237,000 square feet at 355 E. Easy St. The lease is valued at more than $15 million. The company, a division of Masco Corp., plans to occupy about 170,000 square feet and sublease the balance of the building. Milgard is moving from another site in Simi Valley. The company employs about 350 people. Scott Caswell and Bruce Simpson, brokers with Delphi Business Properties, represented Milgard in the deal. Robert Flink with CB Richard Ellis, represented the property owner, Pegh Investments LLC. Simi Purchase D & B; Simi LLC acquired a 16,925-square-foot industrial building in Simi Valley for $1.7 million. The facility, on 87,741 square feet of land, is located at 4496 Runway St. Tim Foutz, a broker with NAI Capital Commercial, represented the buyer and seller, Saltzman Family Trust. Camarillo Development The developers of Camino Ranchero, a 12-building industrial condominium project in Camarillo, have sold nine of the buildings and are in escrow on the 10th unit. Rice Development LLC, which completed the complex last June, said the swift selling activity was due in part to lower interest rates, which make it easier for small businesses to own rather than lease their facilities. Prices for the buildings, which vary in size from somewhat more than 10,000 square feet to just over 3,000 square feet, range from $88 per square foot to $99 per square foot. The total value of all nine sales was about $6.3 million. The buyers included: Newman Trust for use by Neuspeed, an aftermarket accessories supplier for Volkswagen, Acura and Honda parts owned by one of the trust participants; Danny Ghinghis, doing business as AAA Flooring Source Inc., a distributor of floor coverings; JC Industries, makers of tape measures for the construction industry; aircraft parts manufacturer Feecorp Corp.; and beauty supply wholesaler Biojouvance Inc. Two of the buyers, Ciccarelli Trust and David Katz and Denney Federman, acquired the properties for investment. Mike Tharp, Fred Ferro and Eric Behlke, of NAI Capital Commercial, represented Rice Development in the deals. Representing the buyers were: Michael Maloney, Maloney and Associates, for Newman Trust; Mike Walsh of Daum Commercial Real Estate Services for Ghinghis; Steve Dulyea, Oxnard Realtors, for JC Industries; Joe Jusko, Colliers Seeley, for Ciccarelli Trust; Kent Pierce, Equity Commercial, for Feecorp; and Jim Meaney, CB Richard Ellis, for Biojouvance. David Katz, Gold Seal Realtors, represented himself and Federman. Doctor in the House WebMD leased 8,477 square feet at 15400 Sherman Way in Van Nuys in a five-year deal. Carlene O’Neil and Madeline Schwartz of CB Richard Ellis represented the landlord, Decron Management Co. Margie Fichter at Cushman & Wakefield represented the tenant. Senior reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14 or by e-mail at firstname.lastname@example.org.
Market Seen Softening for Warehouse Properties