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Valley Apartment Rental Rates Rise, Supply Still Tight

Rental rates for San Fernando Valley apartment units increased an average of 5.2 percent for the third quarter of 2005 as occupancy rates continued to hover in the high 90-percent range. The average asking rent for the area rose to $1,423 per month for the third quarter, compared to $1,353 a month for the comparable period a year ago, according to a report on multifamily real estate just released by RealFacts, a Novato, Calif.-based research company. The largest rent increases occurred for junior 1-bedroom units. Those rents rose to an average of $1,149 per month in the third quarter, a 9.7 percent increase from the year ago period. Rentals for two-bedroom, one-bath units rose by 6.7 percent to an average of $1,447 per month. Rental rate increases were highest in Canoga Park, Northridge, Sherman Oaks and Woodland Hills during the period, the RealFacts data revealed. Rentals in Canoga Park and Sherman Oaks rose an average 6 percent to $1,186 and $1,523 respectively. Rents on multifamily properties in Woodland Hills increased an average 5.8 percent to $1,534 per month for the quarter. And rentals in Northridge rose 5.6 percent to an average $1,318 per month. The Van Nuys area was least active in the quarter, with rentals rising 0.9 percent to an average of $1,084 per month. Occupancy rates have remained relatively stable in the San Fernando Valley for the past four years, RealFacts said. To date in 2005, the Valley’s multifamily occupancy rates stand at 95.9 percent. As might be expected, prices per unit have risen considerably over the past several years. The average unit price for multifamily sales to date is $229,846. PCS Sale Completed PCS Development has sold a two-property portfolio of multifamily communities for a combined $112.35 million. The properties, the Premiere of Sherman Oaks and the Premiere of Thousand Oaks, sold to Archstone-Smith, a real estate investment trust that has been purchasing a number of properties in the area. The Sherman Oaks property, with 392 units, was renovated in 2000 and is one of the first luxury apartment communities constructed in the San Fernando Valley. Its amenities include a 40-seat theater/screening room, full service concierge, golf putting course, tennis court and san volleyball court. The Premiere of Thousand Oaks was built in 2002 and includes 148 units with similar amenities. “Both the Premier of Thousand Oaks and the Premiere of Sherman Oaks were very successful properties for PCS with excellent rental rates and occupancy rates steadily above 95 percent,” said Todd Shaw, president of PCS Development. “However, given the current market conditions, we felt it was the right time to sell.” Gregory Harris, a vice president at Marcus & Millichap, represented PCS and Archstone in the transaction. Santa Clarita Sale A 53,692-square-foot retail center in Santa Clarita has sold for $16.5 million. The four-year-old center, at 18635 Soledad Canyon Road, is nearly fully occupied with tenants that include Wendy’s IHOP and Time Warner. The sellers of the center, called Shangri-LA, acquired the center in 2002 for $11.4 million. Chris Jackson and John Cserkuti, brokers with Grubb & Ellis, represented the buyers and the sellers, both private investors, in the deal. Jackson had represented the seller in the purchase of the property in 2002 as well. Cserkuti, along with Grubb’s Bert Abel, were selected as exclusive leasing agents for the property. Simi Valley Sale OMP Industrial has acquired a 105,083-square-foot industrial building in Simi Valley for over $8 million. OMP, which is also developing the Chatsworth Business Centre, expects to re-tenant the building, which is currently leased by Credence Systems Corp. OMP’s Chatsworth project, which has just broken ground, is a 16-building center totaling 167,000 square feet. Stuart Milligan, Steve Algermissen, Sean Scott, Richard Plummer and Ray Howden, all with Cushman & Wakefield, represented the buyer and the seller, Bixby Ranch Co. in the Simi Valley deal. Chatsworth Industrial Sale A private investor has acquired a 50,236-square-foot industrial building in Chatsworth for $6.5 million. The building, at 9450 Topanga Canyon Boulevard, was owned by Sun Life Assurance Co. of Canada. The buyer is Francesco Barbarino. John Griffin at Voit Commercial Brokerage in Irvine, and Ross Thomas, a broker with Delphi Business Properties, represented the seller. David Heaver of David Heaver & Associates represented the buyer. Woodland Hills Renewal Continental Business Credit has renewed its lease at 21301 Ventura Boulevard in a deal valued at $2.5 million for 10 years. The company, a provider of asset-based financing and factoring services, occupies 11,000 square feet at its Woodland Hills offices. Robert Chavez, president of Guardian Commercial Realty, represented the tenant. Art Swazo at Arden Realty Inc. represented the landlord. On the Move Brian M. Jones has been promoted to CEO, Forest City California West Commercial Development. Jones had been president. His former position was filled by Colm W. Macken, who was formerly COO of the division. Cleveland, Ohio-based Forest City most recently developed Simi Valley Town Center, which is opening this week. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at sgarcia@sfvbj.com.

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