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Tuesday, Aug 9, 2022
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Landlords May Have Shot Themselves in Foot With Rent Raises

The Conejo Valley may be perhaps the area’s most upscale market, but so far at least, the recovery seems to be absent – at least if you go by the numbers. The vacancy rate in the office market climbed seven tenths of a point to 18.3 percent in the quarter, as the market returned about 41,200 square feet of space, according to the Los Angeles office of Colliers International. Travis Albee, associate vice president at the Woodland Hills office of Sperry Van Ness, said that despite the data, there definitely seems to be more action on the ground. “All brokers I know in the market are seeing consistent activity,” he said. Indeed, the submarket is the only one in the greater Valley where there is ongoing new construction: Denver developer Amstar continues work on Phase II of the Westlake Park Place project in Westlake Village, which is expected to be complete in February. Dole Packaged Foods LLC, subsidiary of Itochu Corp. in Japan, will occupy three floors of the 120,000 square-foot, four-story building, and the ground floor remains vacant. But Albee acknowledged that some landlords may have jumped the gun by prematurely raising rent toward the end of last year as activity picked up. The asking rent for the second quarter was $2.19 per square foot, a penny over the first quarter and 9 cents over the second quarter last year. “Everyone thought things have started to pick up again, but come on, it’s not time to start raising rates,” Albee said. “There’s still space in the market.” The largest transaction in the quarter was in March when ZDI Inc. of Santa Monica purchased the Mission Oaks Technology Center in Camarillo for $11.1 million. Less than 10 percent of the 265,000-square-foot property is occupied by payroll services firm ADP Inc. ZDI Principal Steve Zimmerman is still ironing out plans for the property, but he’s working to separate it into several parcels for potential sales. Among the most notable leases was the move by online sales and marketing firm TouchCommerce to 26,000 square feet at 29903 Agoura Road in Agoura Hills last month. The five-year lease with landlord Realty Bancorp Equities LLC of Woodland Hills is the first positive development for the 104,000-square-foot building, which has sat vacant for more than a year after THQ went bankrupt. The video game developer had its headquarters there. The industrial market as a whole was relatively flat. The vacancy rate dropped one tenth of a point to 1.3 percent, though that is still extremely low, while landlords dropped average asking rates one penny to 72 cents per square foot. However, Patrick DuRoss, vice president at the Encino office of Colliers, said that there is optimism about the market, with landlords expecting companies from other areas to seriously think about relocating as the economy improves. “It’s a great area,” he said. “Tenants (from other areas) might even start to be a little more aggressive and pay more attention to the market in the next three to six months.” – Stephanie Forshee Main Events – A roughly 10,000-square-foot retail building in Thousand Oaks sold last month for about $4.4 million. The 1610 E. Thousand Oaks Blvd. building was purchased by SNS Partners LLC of Westlake Village out of foreclosure. The building on more than 2 acres is fully leased. Tenants include Subway, a Scottrade branch and various fashion retailers. – In March, ZDI Inc. of Santa Monica paid more than $11.1 million for the Mission Oaks Technology Center in Camarillo. The 265,000-square-foot park built in 1984 is nearly vacant, with only payroll services firm ADP Inc. leasing up about 18,000 square feet. The 5151 Camino Ruiz park on 20 acres features four buildings and was acquired from LBA Realty LLC of Irvine. Steve Zimmerman, principal with ZDI plans to separate the property into multiple parcels to sell off. – Last month, Conejo Valley entrepreneur Manny Asadurian leased about 80,000 square feet at 709 Science Drive in Moorpark. The industrial building will serve as home to the Community Marketplace, a swap meet that gained approval from the Moorpark City Council after Newbury Park rejected the concept. The market will only occupy part of the more than 250,000-square-foot building owned by Aldik Artificial Flower Co. of Moorpark. Asadurian said he spent about $600,000 to build out, air condition and heat the warehouse space. – Online sales and marketing firm TouchCommerce moved into 26,000 square feet at 29903 Agoura Road in Agoura Hills last month. The five-year lease with landlord Realty Bancorp Equities LLC of Woodland Hills is the first positive movement for the 104,000 square-foot building since tenant and video game developer THQ went bankrupt a year ago. Financial terms were not disclosed. Conejo Valley Office Market At a Glance Inventory: 6.78 million square feet Under Construction: 178,700 Class A Asking Rents: $2.19

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