Q2 2015 San Fernando Valley and Ventura County Office and Industrial Market Repor4

Vacancies Fall to Single Digits in Some Submarkets as Rents Rise and Sales Activity Escalates

A strong economic rebound in several industries is escalating leasing activity and rapidly filling office space in select submarkets. Business is particularly strong for media and tech companies, financial companies, especially those that support real estate, and professional services firms including accountants and attorneys. These companies are expanding and creating brisk demand for office real estate.

Vacancies declined by 80 basis points (bps) in 2015 as leasing remained consistently active. The Los Angeles North office market finished the year with a vacancy rate of 13.1 percent, the lowest level since the third quarter of 2008 when vacancies were 12.8 percent.

 Leasing activity for the full year totaled 4,366,248 square feet, with 1,873,763 square feet of gross lease activity occurring in the second half of the year. The activity drove quarterly absorption to the highest levels in 11 quarters. In the fourth quarter, 383,100 square feet of space was leased on a net basis compared with negative absorption of 83,324 square feet in the prior quarter and 270,484 square feet of net leasing in the year ago period.

For the full year, 580,900 square feet of space was absorbed on a net basis, falling short of the 954,500 square feet absorbed in 2014, but more than twice the amount of space absorbed in 2013.

New media and tech tenants in particular are driving office demand in a number of submarkets and pushing vacancy levels down to single digits. Downtown Burbank, with vacancies of 6.4 percent; Universal and Studio City with a vacancy of 7.9 percent, the East Valley with a vacancy rate of 8.5 percent, are among the beneficiaries of the increased demand.

As the market tightens, asking lease rates are rising to their highest levels since the second quarter of 2010. At year end, lease rates averaged $2.35 per square foot, up $0.02 per square foot from the prior quarter and $0.05 versus the year-ago period.

A total of 90 office building sales were transacted in the full year, more unit transactions than in any year since 2005. Sale activity has been limited only by the lack of available product and there continue to be many more buyers than sellers in the marketplace.

Leasing and Absorption Slow as Vacancy Rates Decline to a Historic Low of 1.9 Percent

As expected, leasing activity began to slow in the fourth quarter as industrial space became impossibly hard to find. Just 438,793 square feet of space was leased, compared with 778,854 square feet in the prior quarter, and barely one quarter of the 1,758,015 square feet leased in the comparable year-ago period.

Leasing has not been this slow since the fourth quarter of 2008 in the peak of the recession, but the slowdown is understandable given vacancy levels of 1.9 percent as of the fourth quarter. The tight market is also taking a toll on absorption which declined to 481,100 square feet in Q4 compared to 741,826 square feet in the prior quarter.

The recent announcement that Xebec and Cor­nerstone Real Estate Advisors will be construct­ing two warehouse buildings totaling 361,000 square feet in Sun Valley, was welcome news to this space constrained region, but the new buildings will do little to solve the challenges that most of the businesses in the area are fac­ing.

Average asking lease rates are not showing any statistical increases, but the data is somewhat misleading. In some submarkets such as Bur­bank, warehouse inventory is being taken over for creative office uses at rates considerably higher than the averages. The same is true for newer buildings where deals are being consum­mated at average rates closer to $0.80 - $1.00 per square foot compared to the overall, $0.69 per square foot averages.

The desire by business owners to control costs in this rising rate environment, coupled with the continuing low interest rates, is driving an extremely active sales market for industrial properties and, here too, the statistical mean prices don’t always reflect the real dynamics underway.

Still, even the data suggests that building prices are escalating dramatically. For the full year 2015, 172 sales took place at a median price of $142 per square foot, up 28 percent from pre-recession prices. The fourth quarter saw median prices rise 42 percent to $201 per square foot versus Q3 and 76 percent com­pared to the year-ago period.

Slow Job Growth Puts Ventura County Office Market Behind Its Neighbors

The Ventura County office market continues to make strides toward recovery. At the same time we are still seeing some volatility, and the office sector here is still lagging some neighboring markets.

The office market results reflect findings by economists that job growth in Ventura County has been very lackluster. According to the Center for Economic Research and Forecasting at California Lutheran University in Thousand Oaks, jobs will grow at a meager 1.1 percent for the remainder of the year. The report found that job growth is part of a larger picture of weak population growth related to high housing costs and little new housing construction in Ventura County

Just slightly more than 1 million square feet of space was leased over 2015, about 500,000 square feet less than in 2014, and while Q4 vacancy rates fell 130 basis points (bps) versus Q3, the current 14 percent level still fell short of the comparable year ago period when vacancies registered 13.3 percent.

A total of 252,800 square feet of space was absorbed in the fourth quarter, compared with negative absorption of almost the same amount, 252,770 square feet, in Q3, suggesting that at least some of the activity in the market reflects internal movement, not new leases. For the full year, absorption was negative 49,700 square feet, another indication that leasing activity is being driven by companies relocating within the area.

Nevertheless, lease rates are showing fairly steady increases. Direct asking rates averaged $2.01 per square foot in Q4, a $0.02 increase over Q3 and $0.04 per square foot more than the year-ago period.

As has been the case throughout the year, sales activity is very strong. The median price of buildings sold in the fourth quarter rose 33 percent to $260 per square foot, compared to Q3 and 53 percent versus the year ago period. For the full year, the median price of office buildings sold was $203 per square foot, a 20 percent increase over 2014’s median price of $169 per square foot.

Ventura County’s Industrial Vacancies Decline to 4.3 Percent Restricting Options for Tenants

More than 3 million square feet of industrial space was leased in 2015 pushing a 25 per­cent year-over-year increase in absorption and driving vacancy rates down to their low­est levels since the fourth quarter of 2008.

Although leasing was less active in the fourth quarter than it had been in the rest of the year, the activity throughout the year and par­ticularly in the first half of 2015, was enough to push absorption to 703,600 square feet for the quarter and 1,437,000 square feet for the year. (Leased space is not counted in absorption figures until the tenant moves into the space.)

Just 468,811 square feet of space was leased in the quarter, less than the 546,804 square feet leased in Q3 and a little more than half the space leased in the year-ago pe­riod. Indeed, the majority of the year’s leasing activity, about 2 million square feet, occurred in the first half of 2015. Along with the sharp decline in vacancies to 4.3 percent, the num­bers indicate that many tenants are choosing to remain in place as space becomes harder to find.

Vacancies have fallen nearly 200 basis points from the 6.2 percent registered in Q4 2014, and are just 3.1 percent in the Oxnard submarket, 2.1 percent in Newbury Park/ Thousand Oaks and 2.8 percent in Ventura.

Although average asking lease rates slipped to $0.62 per square foot versus $0.65 per square foot in the prior quarter, a look at ask­ing rents by size range paints a very different picture of the market. While average asking rates for spaces larger than 20,000 SF have decreased, rates for space in the 5,000 – 10,000 square foot range have soared near­ly 12 percent over the past year, and at the close of 2015 averaged $0.85 per square foot.

As with leasing, the sales sector reflects considerable strength in Ventura County’s economy. The median price of industrial buildings sold in Q4 was $115 per square foot, unchanged from the prior quarter and a 22 percent increase over the year-ago period when the median price of buildings sold was $94 per square foot. As is occurring in the leasing sector, sales activity was hampered only by availability.

Lee & Associates Commerical Real Estate Services - LA North/Ventura, Inc.


Q3 2015 Ventura County Office and Industrial Market Report

Industrial Vacancy Rates Reached Their Lowest Levels Since Q2 2009 in Ventura County

After holding steady for two consecutive quar­ters, vacancy rates declined 30 basis points (bps) to 5.6 percent in the third quarter, the lowest levels since the first quarter of 2009 and an improvement of 80 bps over the year ago period.

Space has been filling at a steady pace for a number of quarters now, and absorption has also shown steady gains. In the third quarter, 225,000 square feet of space was absorbed, more than 130 percent more than the prior quarter but well below the 424,694 square feet of absorption in the year-ago period. A similar pattern is found in year-to-date ab­sorption which registered 734,200 square feet for the first three quarters of 2015 com­pared to 1,239,900 square feet in the first three quarters of 2014. However, it’s impor­tant to note that the most recent patterns compare very favorably to 2013 when the first three quarters of the year saw negative absorption of 271,000 square feet.

The relatively small size of Ventura’s industri­al market has traditionally led to fluctuations in leasing activity, although each quarter has brought a steady flow of new leases. A total of 555,725 square feet of space was leased in the third quarter, down from 908,111 square feet in the second quarter of the year and from the 863,247 square feet of space leased in the third quarter of 2014.

Average lease rates have also seen similarly inconsistent increases. The average lease rate for the third quarter was $0.65 per square foot, $0.03 lower on a per square foot basis than the average in the prior quarter but $0.02 more than the average of $0.63 per square foot a year ago. Nevertheless, at $0.65 per square foot, the region’s lease rate reached its highest level since Q1 2009.

As is the case in other industrial markets, sales activity has continued to rebound along with sale prices. Year-to-date there were 58 industrial building sales at a median price of $113 per square foot compared with a me­dian price of $106 per square foot in 2014.

Quarter-to-quarter, median sale prices have been ticking up for the past four quarters. In Q3 there were 22 buildings sold at a median price of $115 per square foot, up from $94 per square foot in Q4 2014.

Vacancy Levels Dipped Again in Q3 Driving Average Lease Rates Up $0.05 vs. the Year-Ago Period

Leasing activity was moderate in the third quarter, totaling 250,988 square feet, but the continued steady leasing in the region was enough to knock vacancy rates down. Third quarter office vacancies dipped another 10 basis points (bps) compared to the prior quarter to 14.4 percent and are now 40 bps below the year ago period.

It would appear that the continuing activity is bolstering landlord confidence, and in Q3 we saw another bump in lease rates to $1.97 per square foot from $1.95 per square foot in Q2, and a $0.05 per square foot improvement over the year-ago period.

Absorption rates continue to indicate that the Ventura County office market is taking two steps forward and one step back. In Q3 a total of 23,200 square feet of space was leased on a net basis, somewhat more than the 16,839 square feet of net leasing that took place in Q2 but short of the year ago period when 34,216 square feet of office space was leased on a net basis. Year to date, absorption remained in negative territory with 23,500 fewer square feet leased than were vacated.

Recent news that homebuilder Ryland Group will be closing its Westlake Village office at the end of the year following its merger with CalAtlantic Group Inc. likely reflects continued upheaval for the area’s office market.

The market snapshot is a bit different on the sales side. With brisk levels of sales activity and limited supply, building prices are escalating. A total of 41 office buildings traded year-to-date in 2015 driving a 35 percent increase in prices. Year-to-date, the median price of buildings sold in the region was $191 per square foot, up from $142 per square foot for the same nine-month period in 2014.

For the third quarter, 28 office buildings traded at a median price of $187 per square foot. That median price is down from the prior quarter’s $219 per square foot, but only seven buildings traded in the second quarter of the year.

In summary, fundamentals in the Ventura County office market are showing steady, if slow, improvement consistent with the region’s larger economy.

Lee & Associates-LA North/Ventura, Inc., a member of the Lee & Associates Group of Companies, is a full service commercial brokerage company with offices in Sherman Oaks, Calabasas, Ventura and Antelope Valley. LA North is celebrating its 20th anniversary this year. Additional in­formation is available at


Q3 2015 San Fernando Valley Office and Industrial Market Report

Industrial Vacancy Rates in Los Angeles North Hit a 10-Year Low in the Third Quarter  

Industrial vacancies in the Los Angeles North market hit a 10-year low in the third quarter, declining to 2 percent from 2.4 percent in the prior quarter and 2.6 percent in the year-ago period.

Supply is even tighter when you consider that eight of the region’s 13 submarkets are op­erating with vacancy rates below 2 percent. Among them are Canoga Park, Burbank, Glen­dale, San Fernando/Sylmar/Pacoima/Arleta, Sun Valley and Van Nuys, communities with some of the largest concentrations of indus­trial space.

The severe space constraint is now beginning to affect leasing activity. Just 562,378 square feet of industrial space was leased in the quar­ter, the lowest level since the first quarter of 2009, and a 67 percent decline compared to the prior quarter’s 1,693,395 square feet of leasing.

Perhaps surprisingly, absorption held up in the third quarter with 716,800 square feet of industrial space absorbed. However, since space is not recorded as absorbed until the tenant moves in, current absorption levels re­flect leasing activity over the past several quar­ters, and it’s likely that we will see a substan­tial drop-off in absorption in coming months due to the constrained supply of inventory.

Average lease rates are now $0.71 per square foot, 22 percent above the lows reached dur­ing the recession. Landlords may push rates on a case-by-case basis, but the severe inven­tory shortage is likely to limit average increas­es for the region as we go forward.

Sales activity continues to be brisk although the number of buildings sold in the third quar­ter fell off compared to the prior two quarters of 2015. A total of 36 buildings traded in Q3 at a median price of $141 per square foot. That compares with 95 building sales at a median price of $133 per square foot in Q2 and 56 building sales at a median price of $141 per square foot in the first quarter of the year. The median price of industrial buildings sold in the current quarter reflects a 28 percent year-over-year increase.

Vacancies Continue to Decline and Lease Rates Rise as a Very Active Sales Sector Pushes Building Prices

Los Angeles North office vacancies dipped to 13.8 percent, a decline of 10 basis points (bps) in Q3 versus the prior quarter and 70 bps below levels in the year-ago period. The last time vacancy levels reached 13.8 percent occurred in Q4 2008 as the impact of the recession was just hitting the Los Angeles North office market. Ultimately, vacancy levels rose to 19.1 percent before beginning the current pattern of descent in 2010.

As space fills, landlords have become more willing to push rents, although the pattern of lease rate increases can best be described as cautiously assertive. In Q3 asking lease rates averaged $2.31 per square foot, $0.02 per square foot more than the average in Q2 and $0.05 per square foot above the year-ago period.

Lease rates in the region continue to remain well below pre-recession highs of $2.50 to $2.70 per square foot, an indication of the slower pace of job market recovery and the way office space is filling. Los Angeles County continues to underperform California and the country at large in employment and earnings recovery.

The spotty nature of the market’s performance can best be seen in absorption levels, which in the third quarter were a meager 61,800 square feet. That compares with absorption of 176,977 square feet in the prior quarter and 290,027 square feet in the year ago period. On a year-over-year basis, absorption was 342,892 square feet compared with 725,000 square feet in the same nine-month period in 2014.

While there has been a steady stream of leasing in size ranges from 2,000 to 5,000 square feet, the market also saw large blocks of space given back in some submarkets in the current quarter, among them, Burbank, North Hollywood and Warner Center, and to a lesser extent, Sherman Oaks and Encino. Except for Burbank, those submarkets all registered negative absorption levels in the quarter. That said, the pace of leasing activity in the last two quarters should push absorption levels up in Q4.

The sales sector continues to be the brightest star in the market with year to date median prices for office buildings rising to $223 per square foot, the highest levels since 2010, and the number of sale transactions on pace to exceed that of any recent year.

Lee & Associates-LA North/Ventura, Inc., a member of the Lee & Associates Group of Companies, is a full service commercial brokerage company with offices in Sherman Oaks, Calabasas, Ventura and Antelope Valley. LA North is celebrating its 20th anniversary this year. Additional in­formation is available at



Thousand Oaks Medical Office for Lease - Suite 205 Video Tour

Thousand Oaks Medical Office presents suite 205 at the Rolling Oaks Medical Center. The suite has a double door entrance off the second floor lobby, directly across from the elevator. The medical office has a private back entrance and exit, private waiting room for patients, medical staff administration room, 2 filing and lab rooms, 2 exam rooms, private restroom, consultation room and windowed office.  The medical suite is located at 425 Haaland Drive, Thousand Oaks.


Agoura Hills Office for Lease

Looking for a reasonably priced professional or medical office in the city of Agoura Hills? Creekside Plaza is certainly worth considering. With reasonable rental rates and a variety of office layouts and designs, Creekside Plaza can accommodate the traditional as well as unique businesses looking for the right office space with the right lease terms. If looking to invest long term capital into your business location, Creekside Plaza’s ownership and management fully understands the value into investing back with you into the space with on one of a kinds building finishes and designs to create the environment and functionality you are envisioning.  The office building can also accommodate a variety of medical practices and has the experience of going thought the permitting process and medial office design and build. 

The Agoura Hills office building has recently undergone renovations that include the exterior floor finishes, first floor lobby areas and hallway corridors.  The building has also upgraded to a more efficient heating and ventilation system.

The management team is professionally trained and is ready to assist you with any building matters. Janitorial services are provided in the building and is kept clean throughout the interior and exterior.          

Neighboring cities include Calabasas, Oak Park, Westlake Village, and less than 10 miles from Woodland Hills and the San Fernando Valley. The office building is conveniently located south of the 101 Ventura Freeway just off the Kanan Road exit at 28720 Roadside Drive, Agoura Hills.

Unique features that differentiates this Agoura Hills office building to others is the underground and ample surface parking. The common parking area is wrapped around the entire building for convenient entry points into the building.  The exterior is well landscaped with California-native plants and nestled against the Santa Monica mountains. 

Not exactly sure what you are looking for, the professional leasing agents at the building can assist you with your requirement.


Q2 2015 San Fernando Valley Office and Industrial Market Report

Office Market Recovery Strengthens for Leasing as Sale Prices Near Pre-Recession Levels

If the numbers for the second quarter are any indication, the Los Angeles office market recovery appears to be right on schedule. Fundamentals improved across the board in the quarter, and just as important, the data shows a consistent upward trend unbroken over more than four quarters.

Vacancies fell to 13.9 percent versus an adjusted 14.1 percent in the prior quarter and a 90 basis point (bps) improvement from the year ago period. The current quarter marks the first time vacancies, which have trended downward consistently since 2010, fell below 14 percent since Q4 2008.

On a net basis, 193,000 sf of space was leased in the quarter, a 135 percent improvement over the Q1 when 82,226 sf of office space was leased on a net basis.

Strong leasing activity is driving these improvements. In Q2, 1,238,378 sf of office space was leased, up from 976,350 sf of leasing in Q1 and bringing leasing volume for the first half of the year to 2,214,728 sf. With the exception of the first quarter of 2015 and the fourth quarter of 2014, leasing activity has exceeded 1 million sf in every quarter since Q1 2012.

As might be expected, the strong fundamentals have driven up lease rates, which in the current quarter rose by $0.03 to $2.28 per sf vs. $2.25 per sf in Q1.

Sales activity has been equally strong, and the median price of office buildings sold to date in 2015 reached $244 per sf, the highest since 2008 when the median price was $256 per sf.

There were 22 office building sales in Q2 achieving a median sale price of $235 per sf, somewhat less than the $245 per sf sale price in Q1 but an increase of 30 percent over the year-ago period when the median price of buildings sold was $181 per sf.

More office square footage is under construction than at any time in recent memory, thanks largely to 285,000 square feet of office space that has come out of the ground at The Village at Westfield Topanga and a 118,000-square-foot medical office building underway in Tarzana.

Industrial Lease Rates Now Just $0.04 PSF Off Pre- Recession Highs as Market Remains Exceedingly Tight

Lease rates continued to climb in the sec­ond quarter amidst strong leasing activity and exceedingly low vacancy rates.

The average asking lease rate for industrial properties rose another penny to $0.70 per square foot compared to Q1 and $0.06 per square foot compared to the year-ago pe­riod. Average lease rates are now as high as the market has seen since Q4 2008 and just $0.04 off the pre-recession high of $0.74 reached in Q3 2007.

The upswing in lease rates is no surprise considering that we have now seen sub- 3 percent vacancy levels for the past five quarters. In the current quarter, the vacancy rate measured 2.4 percent, 10 basis points (bps) above the 2.3 percent vacancy rate in Q1 and 50 bps below vacancy levels in the year-ago period. The slight uptick in no way indicates a change in the headwinds for the industrial sector as evidenced by continued strong leasing activity.

For the current quarter, 1,377,822 square feet of industrial space was leased in the region, 330,000 square feet more than the prior quarter. While the current level of leas­ing activity is below the 1,837,454 square feet leased in the year-ago period, the de­cline is understandably attributable to the sheer scarcity of available space.

Admittedly, absorption fell off in the quarter, but as with leasing activity, absorption can be expected to slow as the market tightens.

A total of 95 industrial building sales took place in the first half of the year, just 11 fewer sales than occurred in all of 2014. With the second half of the year traditionally seeing the larger portion of annual sales ac­tivity, this year promises to set a record for industrial sales in the region.

Median sale prices are already hitting new highs. The median price of buildings sold in Q2 was $142 per square foot, a dollar per square foot off the median in Q1 and an increase of 19 percent over the year-ago period.

The last time the median sale price ex­ceeded $140 was 2009 and only six sales were transacted at that time. Institutional investors continued to show interest in the submarket: Prologis acquired two buildings in the quarter.


Westlake Village Office For Lease - North Ranch Atrium Suite 240

The North Ranch Atrium office in Westlake Village is pleased to present suite 240 available for lease. The as-built office floor plan is a very functional space with private reception area, 3 windowed offices, bullpen area with natural light,  kitchen/break area and storage. The efficient office works well for a variety of professional uses looking for office space in Westlake Village.   


Westlake Village Office For Lease - North Ranch Atrium Suite 234

The North Ranch Atrium in Westlake Village has a variety of office spaces for lease. Suite 234 is a unique 2 story office unit with balcony.  The office space has vaulted ceilings and beautiful windowline with open area. The space has 2 private offices or conference room, reception area, storage closet, built-in cabinets and much more. The office suite is turn-key ready for a private practice, small business or locally based organization looking for a professional office for lease in Westlake Village.


Westlake Village Office For Lease - North Ranch Atrium Suite 230

The North Ranch Atrium in Westlake Village offers a professional office suite available for lease.  The entrance faces the tranquil atrium with lush landscaping and water features. The inviting reception area is combined with an open bullpen area or flexible creative space. There are 2 private windowed offices and 1 interior office or conference room. As a additional feature, the unit also has a private restroom.  The efficient office space is perfect for a professional business or organization looking to rent office space in Westlake Village.


Thousand Oaks Medical Office - 425 Haaland Drive

425 Haaland Drive in Thousand Oaks is contemporary medical office building for lease. One of several medical offices located in the Rolling Oaks Medical Center located just south of the 101 Freeway.  A great network of physicians in this medical campus in addition to the Thousand Oaks Surgical Hospital.


Thousand Oaks Medical Office for Lease - 375 E. Rolling Oaks Drive

375 E. Rolling Oaks Drive is part of the larger Thousand Oaks medical campus called the Rolling Oaks Medical Center. One of the premier Class A medical office buildings in the Conejo Valley.


The New Standard - Marketing Commerical Real Estate

The opportunity came my way from my best friend. I was about to learn from a test project about social media marketing in real estate.  Still to this day, majority of the commercial real estate broker dismiss most of the forwarding thinking technology that is already here. This is due primarily to their long client based relationships and tenner in the industry.  

The test project was to assist in the marketing efforts towards exposing an estate to the digital world. Already was an amazing video tour with aerial views taken from a private aerial videographer and a visually appealing web site. The challenge was that there were not many views or visits to the website. The plan was to create a full circle using the other social media platforms such as Facebook and Twitter and utilize all the social media vehicles in sequence to lead followers to the web site.  The truth was that I didn't completely understand how everything was going to work out.  Setting up the accounts were fairly easy and the rests was manpower. The plan was to make as many authentic connections and continue to post daily relevant posts.  The Facebook advertising dollars also assisted greatly. Facebook advertising has a user friendly demographics targeting strategy. Without a doubt, this made a significant difference in targeting new traffic to the site.  The end result was success. I was able to significantly increases to the landing page visiting and expose the estate to a much larger digital world.

Through this experience, I learned a valuable lesson about the social media world and how it might work in commercial real estate.  The next project that I would experiment with would be for an office building in Woodland Hills. When traditional commerical real estate marketing efforts needed some additional support, this is what happened. Stay Tune.


Thousand Oaks Medical Office For Lease - Rolling Oaks Medical Center

The Rolling Oaks Medical Center is a Class "A" Medical Office campus in Thousand Oaks. The campus has several medical office buildings with a diverse mix of health care specialists. 375 & 415 E. Rolling Oaks Drive and 425 Haaland Drive make up 3 of the buildings within the medical center and offers several available medical suites for lease. The location has a built-in network of physicians and houses the Thousand Oaks Medical Hospital, part of the Los Robles Hospital and Medical Center.  Located in the beautiful rolling hills of Thousand Oaks, the property has convenient access to the 101 Freeway.


Simi Valley Office For Lease - Simi Valley Business Center

40 West Cochran Street is a professional office building for lease in Simi Valley. The building offers a variety of functional suites. Several of the office suites have terrific windowline, reception area, conference room, open cubical area, storage closets and more. The building can provide up to 4 per 1,000 parking and is elevator served. Additionally the building provides 5-day suite janitorial service and utilities.
Located across the street from Costco, 40 West Cochran has excellent freeway access to the 118 Freeway. This Simi Valley office for lease is located near Wood Ranch and the Conejo Valley and is centrally located between Santa Barbara and the Los Angeles Counties.


Q1 2015 Office And Industrial Market Report San Fernando Valley

Vacancies Edge Up a Bit While Institutional buyers Drive a 17% Increase in Sales Prices

Office vacancies have remained in the 13 percent range for three straight quarters now, an improvement of 110 basis points (bps) from Q1 2014.

In Q1 2015, the vacancy rate was 13.7 percent, somewhat higher than last quarter’s 13.4 percent vacancy due in part to large chunks of office space that became available. In Sherman Oaks, for example, three spaces totaling 44,484-square-feet became available at 15260 Ventura Blvd., and four spaces totaling about 67,000 square feet including one measuring 25,204 square feet became available at 15301 Ventura Blvd. In Woodland Hills, a 27,694-square-foot space became available at LNR Warner Center and a 17,985-square-foot space became available at The Trillium in Woodland Hills.

Though still in positive territory, absorption slowed to 69,200 square feet, compared to 156,947 square feet in the prior quarter and 87,195 square feet of net leased space in the year-ago period. It should be noted that absorption has remained positive for nearly every quarter over the past three years.

Although not reflected in the data as yet, we have seen a significant uptick in activity recently, and job growth forecasts suggest that vacancy levels and absorption will post more significant improvements as the year progresses. A just-released forecast by Loyola Marymount University and Beacon Economics projects that Los Angeles County will add 75,000 jobs in 2015, amounting to a 1.7 percent rate of growth, just short of the 2 percent growth rate economists described as ‘robust’ last year. The unemployment rate is expected to decline to 7.3 percent by year end.

Sales activity in the quarter was robust, with 18 buildings changing hands including several institutional sales. The activity drove the median sale price up nearly 17 percent to $245 per square foot compared to the prior quarter and 36 percent higher than the year ago period. Among the quarter’s transactions was a Valencia medical office building acquired in a 97-building portfolio deal by Select Income REIT and sold on the same day to Senior Housing Properties Trust. Also among the quarter’s transactions was the sale of the Dreamworks campus in Glendale.

Sales and Prices Skyrocket and Asking Lease Rate Rise as Options for Tenants Shrink

 Industrial sales activity took off like a rocket in Q1. There were 60 industrial buildings sold in the first quarter of the year, more than half the number of buildings sold in all of 2014.

The large number of sales is in part due to a portfolio sale that included 22 San Fernan­do Valley properties, accounting for nearly 37 percent of all the buildings sold in the quarter. Global Logistic Properties Ltd., Sin­gapore, acquired 22 industrial buildings to­taling 651,794 sf in Chatsworth, North Holly­wood and Sun Valley. The Valley transactions were part of a 1,073-building, national port­folio that was sold by The Blackstone Group LP for just over $8 billion. In another of the transactions that took place in the quarter, Ikea acquired 13 industrial buildings total­ing 402,919 sf to build its new mega-store in Burbank.

The Ikea transaction aside – it will effectively remove 400,000 sf of industrial buildings from the Burbank marketplace – the high level of sale activity mirrors what is happen­ing nationally in the industrial real estate market.

Across the country, industrial investments have become a hot commodity pushing up values 17.8 percent over the past 12-month period, more than any other product type, according to Moody’s/RCA. The interest is nearly as strong for industrial properties in suburban markets, the report found.

The institutional transactions in the LA North region pushed the median sale price to $143 per sf in the quarter, up 25 percent com­pared to Q4, 2014 and a 10 percent increase over the median sale price of $130 per sf a year ago.

Vacancy rates fell another 20 basis points (bps) to 2.4 percent, and lease rates rose to $0.69 per sf, $0.02 higher than the prior quarter and an increase of 11 percent over the year-ago period.

Despite the tight market, 333,600 sf of in­dustrial space was absorbed in the quarter, nearly 201,000 more square feet compared to Q4, but well below the 824,385 sf leased on a net basis in the year-ago period.

The lack of available space was more evi­dent in the decline in leasing activity. Just 908,860 sf were leased in the first quarter, a 44 percent decline over Q4 2014 when 1,615,906 sf of industrial space was leased, and 34 percent less than the year ago period when 1,382,803 sf of space was leased.


North Ranch Atrium - Westlake Village Premier Office for Lease

Westlake Village is an affluent and tranquil community between the Los Angeles County and Ventura County line.  The city of Westlake Village is surrounded by the Santa Monica Mountains with beautiful recreational space. The weather is mild year round and attracts corporate office headquarters due to the lifestyle amenities and location to upscale communities with convenient access to the Ventura 101 Freeway. Thousand Oaks Boulevard, one of Westlake Village’s main transportation arteries offers a variety of retail attractions as well as some of the Conejo’s Valley’s best eateries.  Nestled in the heart of Westlake Village is the North Ranch Atrium Office building. This Westlake Village office has a variety of available office suites for lease. The perfect rental for all types of professional businesses, but also the unique atmosphere is the best added value to any company looking to relocate to an office complex with beautiful water features and tropical landscaping. This is truly a hidden jem in Westlake Village that also has convenient access to The Promenade at Westlake Village that is located directly across the street.  A short walk across the street to casual and fine dining for meeting clients and company get-togethers. The North Ranch Atrium is truly a home away from home with its relaxed setting.

To find out more about North Ranch Atrium, Westlake Village’s premier office for lease, please contact Cory Richmond at 818.444.4915 or Eric Nishimoto at 818.444.4984 for leasing availability. Please come visit for more information about leasing and Westlake Village’s office rental market.  


Northridge Warehouse - Perfect Owner User Auto Body For Sale

18531 Eddy Street is a hard to find warehouse in Northridge for sale.  It’s not often that this size of a building becomes available on the marketplace. With the turn of the real estate market, development in industrial buildings were put on hold as the ground up cost to develop new commercial buildings far exceeded the replacement cost of existing buildings. As an owner user ready to purchase a property, it made much more sense to buy an existing building and to remodel or reuse the existing structure. For developers to make economic sense of building industrial buildings today, large developments or economies of scale is the only way to pencil out the cost of new construction. Today the closest development is located on De Soto Ave and Nordhoff Street. The developer here is constructing multiple commercial buildings with approximately 15,000 sq. ft. as the smaller end of sizes.

18531 Eddy Street was built at time where the construction costs and rental rates made some sense to build smaller freestanding industrial buildings. A true rare gem in Northridge with a price point that opens up the market to a variety of hobbyist and small businesses looking to own and operate out of their property.  



Q4 2014 Office and Industrial Market Report San Fernando Valley

Office Market Makes Significant Strides as Absorption Rises Three-Fold vs. 2013

What a difference a year makes! The banner recovery in the office market was marked by huge improvements in absorption and a steep drop in vacancy rates compared to 2013.

For the full 2014 year, absorption increased nearly three-fold to 954,500 square feet compared to 241,400 square feet of net absorption for 2013. Vacancy rates, which have been declining for seven straight quarters, ended the year at 13.1 percent, down 180 basis points (bps) over the fourth quarter of 2013; and the median price of buildings sold in 2014 increased 17 percent to $189 per square foot compared to a median sale price of $161 per square foot in 2013.

Leasing activity slowed in the fourth quarter, with 676,067 square feet of office space leased compared to 949,761 square feet of leasing in Q3, and 1,699,334 square feet of leasing in the year-ago period. However, current leasing activity more closely approximates the leasing levels we saw quarterly prior to the recession, indicating that the market is simply returning to more stable, prerecession levels.

Similarly, average asking lease rates are not showing a great deal of movement. The average asking rate was $2.26 per square foot in the fourth quarter, unchanged from the prior quarter and just one penny more than the rate in the year ago period. But the averages do not reflect the recovery in some Class A buildings in primary submarkets such as Sherman Oaks, Calabasas, Studio City and the East Valley where landlords are commanding lease rates in excess of $3 per square foot.

For the year, 65 office buildings traded, somewhat less than the 83 buildings sold in 2013, but the sales sector was far more active than it had been earlier in the recovery. There were 47 building sales in 2012 and just 31 in 2011.

A total of 10 buildings traded in the fourth quarter at a median sales price of $225 per square foot, a 49 percent increase over $151 per square foot for the fourth quarter of 2013. Among them, the 44-acre Northridge Business Center which will undergo redevelopment.

Severe Shortage of Product to Lease Contributes to Most Robust Sales Activity Since 2006

 The Los Angeles North industrial market has become impossibly tight, leading to a falloff in leasing activity and with it, weak­ening absorption rates. On the other hand, sales activity has been robust as compa­nies unable to find space to lease are turn­ing to acquiring facilities, especially with today’s low interest rates.

The vacancy rate in the fourth quarter dropped to 2.4 percent from an adjusted 2.7 percent in the third quarter and 3.9 percent in the year-ago period. Even more telling, if you remove the space available in the Antelope Valley and the Santa Clarita Valley, vacancies would be 1.6 percent.

Considering the tight market, leasing activ­ity held up pretty well in the fourth quarter with 1,013,034 square feet of deals trans­acted, just slightly less than the 1,247,788 square feet of space leased in the prior quarter, but nearly one half million square feet less than the year-ago period. Lease rates have risen 8 percent compared to the year-ago period and are now averaging $0.67 per square foot.

Last year at this time the market was still giving back space with a number of sub­markets reporting more space vacated than was leased. Just 283,100 square feet of space was absorbed in the full 2013 year as a result. By comparison, full year absorption for 2014 was 1,842,100 square feet, with virtually no negative ab­sorption anywhere in the region. But ab­sorption has been trending downward on a quarter-to-quarter basis as the market has tightened. In Q4, 319,100 square feet of space was leased on a net basis compared with 373,472 square feet of absorption in Q3.

There were 104 industrial building sales in the region in 2014, more than in any other year since 2006 when 117 buildings traded hands.

While median sale prices have been ris­ing steadily since 2011, prices have still not caught up with the market peak. For 2014, the median price of buildings sold was $118 per square foot, an 8 percent increase over 2013 and 12 percent high­er than 2012 when the median price of buildings sold was $105 per square foot.


Northridge Commercial Real Estate In Review 2014

Reflecting on 2014, Northridge commercial real estate was interesting as movement of property was healthy as compared to previous years.  To note, in October, the well known Black Angus Steak House on Corbin Avenue traded hands. The property was sold as an investment property to an individual for $3.9 million. The passive investment with leases through 2018 is situated on 1.66 acres with 106 parking spaces allowing for a variety of uses down the line. Corbin Avenue from Nordhoff north to Plummer Street has some real intrinsic value as real development possibilities within the vicinity will dramatically change the atmosphere.

Retail and Fast Food center such as on Corbin Avenue and Nordhoff across from Lowe’s have been getting a lot of attention and achieving high sales prices for the Sellers. Local passive single tenant NNN leased properties are in demand. Also to note the redevelopment of the Nordhoff and Reseda eating establishment corridor with the newly opened Starbucks.

With entertainment, the Northridge bowling alley on Balboa, Matador Bowl comes to mind. It only makes sense for a business operator to own the property. Financing for SBA and special Owner-User lending programs are supporting the higher values in real estate that typical passive investors are finding it hard to financially pencil out. Interest rates such as the 10yr treasury will continue to remain low with a possibility of slight increases over the next 2 years.

Health Care properties in Northridge, more particular assisted and senior living facilities has been active with REITS and equity partnerships in 2014.  Northridge Senior Living on Lindley Ave is one of two properties to note. However the newly built property located at 9222 Corbin – The Village at Northridge will be one to watch. I speculate, interesting additions to the property are to come in the next couple years.

The Northridge Post Office was traded under the radar.  Eyes on this property for future planning has not been overlooked. This property should be interesting to follow in the next 5 years as plans will be in the works to transform the property.

In mid October of 2014, the Northridge Businesses Center sold for almost $46.5 million. This property although located in an area that is transforming will be the catalysts for other similar outdated office and R&D parks to repurposing and reinvest. This property known as The Campus will be interesting to follow as revitalization takes place in this area of Northridge.


Q3 2014 Office and Industrial Market Report San Fernando Valley

Market Now Just Inches From Pre-Recession Highs as Dramatic Improvements in Absorption and Vacancy Levels Continue

The office market continued to make strong improvements in the third quarter with the highest absorption levels seen in several years, a dramatic drop in vacancy levels and healthy increases in median sale prices.

A total of 381,600 square feet of office space was leased on a net basis in the quarter, 85,562 square feet more than was absorbed in the prior quarter and the strongest absorption since the fourth quarter of 2012 when 396,740 square feet of net space was leased.

With strong absorption continuing now for five consecutive quarters, office vacancy rates fell another 60 basis points (bps) to 13.8 percent compared to the prior quarter, and are now nearly 200 bps below year-ago levels. Vacancies have been falling consistently for five quarters and in Q3 reached the lowest levels since Q3 2008.

Even Warner Center, where vacancies had reached peak highs during the recession and were very slow to recover, saw dramatic improvement with vacancy falling 130 bps to 13.1 percent in the quarter compared to Q2 and 140 bps compared to the year ago period.

Average asking lease rates seem to be recovering at a slower pace. Still, the average lease rate in the current quarter was $2.25 per square foot, down $0.01 from the prior quarter and an increase of $0.03 per square foot compared to two years ago.

Sales velocity has doubled since the height of the recession. In the year-to-date period, 33 office buildings changed hands driving the median price of buildings sold to $181 per square foot.

There were 13 office buildings sold in the third quarter at a median price per square foot of $251, compared to nine building sales at a median sale price of $181 per square foot in Q2.

Third quarter median prices were just 15 percent off their pre-recession highs of $295 per square foot in Q3 2007. Although sales velocity was far stronger in Q3 2007 with 36 buildings sold, it is important to note that the for-sale inventory in the Los Angeles North market is extremely constrained. In other words, sales velocity is limited not by demand but by the inventory available.

 Virtually No Room Left at the Inn-dustrial Table as Vacancies Tighten to 3 Percent

 To say that the industrial market continued its upward trajectory in the third quarter may be understating the case quite a bit.

Vacancies declined another 30 basis points (bps) in the quarter to 3 percent compared to the prior quarter and are now 100 bps below the already tight market of a year ago. In nearly half of the region’s submar­kets—Canoga Park, Glendale, North Holly­wood/Universal City; Northridge, Reseda/ Tarzana, Sun Valley and Woodland Hills – vacancies are sub-2 percent, offering very few options for tenants.

Average asking lease rates reached $0.65 PSF in the quarter, an increase of $0.01 PSF over the prior quarter and $0.03 more than the year ago period. Average lease rates have risen 16 percent since Q4 2011.

A total of 1,132,278 square feet of space was leased in the quarter, so far ahead of pre-recession levels that the year-to-date activity in 2014 (4,143,562 square feet) surpassed the full year activity in both 2007 (3,617,589 square feet) and 2006 (2,675,497 square feet).

Still, the current quarter activity was a con­siderable 45 percent below the year-ago period when 2,067,768 square feet of in­dustrial space was leased, and absorption slowed proportionately to 353,200 square feet, almost 143,000 fewer square feet leased on a net basis than in the compa­rable 2013 quarter and an indication that the tight market is having an adverse im­pact on these fundamentals.

As space becomes harder to find, we see a number of tenants opting to acquire fa­cilities when they find suitable buildings. There were 43 industrial buildings sold in Q3, a 68 percent increase over the prior quarter and 61 percent more than were sold in the year-ago period. The increased demand has pushed the median sale price of industrial buildings to $121 per square foot for the year-to-date period, an 11 per­cent increase over the median price of $109 per square foot in 2013. Although the median sale price for Q3 registered only $110 per square foot, that figure (and the year-to-date median) would likely be considerably higher had pricing been avail­able for 16 of the 43 buildings sold.