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Saturday, Sep 23, 2023

Strong Absorption

Strong Absorption Continues Throughout the San Fernando Valley Capital Commercial/NAI has reported a continuing increase in the absorption of available industrial space throughout the San Fernando Valley. “Due to an increasingly strong regional economy and the demand for warehouse, manufacturing and R & D; facilities, we are seeing a lack of available quality industrial space in all sectors of the San Fernando Valley,” noted David Young, Vice-President. As a result of the tightening market, rental rates on industrial property have increased on average between 15% and 20% over the past year and concessions have been sharply reduced. Landlords are limiting free rent and rental adjustment increases are more frequent over the lease term. The market has shifted in favor of the landlord and seller. With this increasing need for quality product, the market is experiencing a resurgence of state of the art build to suit construction of large box warehouse space. Several build-to-suit projects include the Cascade Business Park and Roxford Business Park in Sylmar as well as the Lewis Business Park in Van Nuys and The Van Nuys Center at the plant which is the former General Motors facility. These business parks offer prospective tenants and buyers large build-to-suit opportunities for state of the art buildings in excess of 100,000 sq. ft. As a result of limited space within these parks, there is strong competition among prospects seeking quality space for relocation throughout the Valley. “Usage of industrial space concentrates in the various San Fernando regions”, noted Young. For instance, the East and Northeast sections have historically offered tenants more facilities for manufacturing, warehousing and distribution due to their immediate proximity to several freeways and major transportation arteries. The Southeast which includes the area around Burbank, has seen a tremendous increase in the need for entertainment production studios and prop storage facilities. As a result of this growing need and the lack of available space, entertainment firms are expanding into large industrial facilities in the West Valley. With an increasing lack of available product throughout the Valley, developers are planning to build state of the art business parks in areas adjacent to the San Fernando Valley. In Simi Valley, Wohl Investors recently purchased twenty two acres at the Tapo Canyon Business Center and will construct two state of the art industrial buildings of 132,850 sq. ft. and 184,635 sq. ft. which will feature above code parking, high ceiling clearance and lush landscaping. This business center, which is owned by Heritage Oak Partners, offers land for sale or construction of state of the art buildings of 135,000 sq. ft., 100,000 sq. ft., 70,000 sq. ft. and 47,000 sq. ft. “As businesses continue to expand into and relocate within the region, the need for large state of the art industrial space is a situation we see continuing,” noted Young. For information on available industrial space, please contact David Young. For information on The Tapo Canyon Business Center, please contact Bob Scullin. Both Mr. Young and Mr. Scullin may be reached at Capital Commercial/NAI at (818) 905-2400. Capital Commercial is the exclusive Los Angeles, Ventura, Orange, Riverside and San Bernardino County affiliate of New America International with ten offices throughout the five county greater Los Angeles area to serve clients’ commercial real estate and asset management needs.

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