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 www.lee-associates.com.

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 www.lee-associates.com.

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.  

http://www.thousandoaksmedicaloffice.com/425-halland-drive/

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.

http://www.agourahillsoffice.com/

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.

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. http://woodlandhillsoffice.com/

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.

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.

Q2 2014 Office and Industrial Report San Fernando Valley

A Surge in Leasing Activity and Marked Improvement in Employment Drives Vacancies Down and Lease Rates Up

Another surge of leasing activity and marked improvement in employment levels drove office vacancy rates down to 15.5 percent in the second quarter compared to 15.8 percent in the prior period. Vacancy has improved by 150 basis points (bps) compared to the year-ago period.

There were 1,355,898 square feet leased in the quarter, up nearly 20 percent over the prior quarter although 365,762 square feet less than the space leased in the year-ago period. Velocity declined 18 percent from the first half of 2013 as well. A total of 2,492,863 square feet was leased in the first half of 2014 versus 3,039,301 square feet leased in the first half of 2013.

But the modest slowdown comes as lease rates show increasing strength. The average lease rate in Q2 was $2.27 per square foot, up $0.03 per square foot from the prior quarter and $0.05 per square foot compared to the year-ago period. Indeed, much of the pressure landlords were feeling to lease their buildings last year has subsided, and the average asking rate in the current quarter is the highest we have seen in the market since the fourth quarter of 2010.

It should be noted however, that average asking rates are still16.5 percent off their highs of $2.72 per square foot in Q2 2008

Absorption has been positive for the past four quarters with another 210,100 square feet absorbed on a net basis in Q2. This follows a Q1 absorption rate of just 59,131 square feet and a significant improvement from the year ago period when 179,715 fewer square feet were leased than were vacated.

Median sale prices for office buildings have been trending upward for the past three quarters and registered $196 per square foot in Q2 with a total of 10 buildings sold. Including distressed sales and those for which no sale price was reported, the median price was $230 per square foot with a total of 12 building sales.

Year to date the median price of buildings sold in the region was $190 per square foot. There were 22 office buildings sold in the period. Prices have risen 6 percent compared to 2013 when the median price of buildings sold was $179 per square foot.

 Industrial Vacancies Continue to Fall and Sales Momentum Builds

 Vacancy levels in the Los Angeles North in­dustrial market fell even further and the steady pace of absorption continued in the second quarter.

Vacancies declined to 3.4 percent in the quarter, down 20 basis points (bps) from the prior period and 110 bps compared to the year-ago period. Nine of the area’s 13 sub­markets are now showing vacancy levels be­low 3 percent leaving few options for tenants looking for industrial space.

Absorption has been very strong, and in Q2 2014 354,300 square feet was leased on a net basis. By comparison, 423,752 fewer square feet were leased than were vacated in the second quarter of 2013. For the year to date, 1,034,000 square feet of space was absorbed versus 233,723 square feet of ab­sorption in the first half of 2013.

With the steady pace of improvement, land­lords are beginning to increase rents. After more than two years with little change in lease rates, the average rate rose by $0.02 per square foot compared to the prior three quarters to $0.64 per square foot and by $0.03 per square foot versus the year ago period. The last time average lease rates were $0.64 was the third quarter of 2009.

While rock-bottom vacancy levels and expec­tations that lease rates will continue to rise are fueling investment activity, the shortage of suitable buildings is spurring more busi­ness owners to opt for purchasing rather than leasing their space. In the year-to-date period 42 industrial buildings were sold at a median price of $128 per square foot, an in­crease of 17 percent in the price of buildings sold compared to 2013. Sale prices have risen 28 percent over the past two years.

For the most recent quarter, 19 buildings were sold at a median price of $120 per square foot. Including distressed properties and those for which no sale price was report­ed, 25 buildings were sold at a median price of $119.

Much has been written recently about the constrained supply for industrial buildings, and nowhere is that more true than in the Los Angeles North market. The conversion of much of the area’s manufacturing real estate to multifamily or retail space and scarcity of raw land has left few opportunities for the development of new inventory, and a mere 59,000 square feet of new industrial con­struction is currently underway.

Q 1 2014 Office and Industrial Market Report San Fernando Valley

Q1 2014

Market Moves a Tad Slower in Quarter, But Longer Term Trends Remain Positive

The Los Angeles North office market quieted down somewhat in the first quarter, although leasing activity continued to exceed 1 million SF.

Vacancy levels remained unchanged at 16.2 percent compared to the fourth quarter, and have fallen nearly 100 basis points (bps) compared to vacancies of 17.1 percent in the same period last year.

Just over 1 million SF of office space was leased in the quarter, about 38 percent less than the 1,624,000 SF leased in Q4 and down from the year ago period as well. The slowdown in velocity seems to have impacted absorption during the quarter, but it’s equally important to note that leasing has been strong now for the past nine quarters, an indication that the recovery in the office market is proceeding at a pace consistent with the economic growth we are seeing.

Only 31,200 SF of space was leased on a net basis during the quarter, down significantly from Q4 when net absorption totaled 298,035 SF. However, over the past 12 months, 504,000 SF of space has been leased on a net basis, amounting to a solid 1.1 percent growth in occupied space over that period.

With that level of progress, developers are reentering the market. Although the 200,000 SF of office space currently under construction is probably insufficient to make any real impact on available inventory, it is indicative of a return of confidence. Not to be overlooked, Laurel Canyon Plaza, a 90,000 square foot office building in North Hollywood and a neighboring retail building, was acquired by Goldstein Planting Investments for redevelopment.

Indeed, the Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey released late in January showed that sentiment in the office market is highest in Southern California. About 70 percent of the survey respondents in the region said they planned to commence one or more projects within the next 12 months.

Sales activity too slowed in the quarter with just 10 sales taking place, compared with 19 in the year-ago period. With fewer transactions, the median price of office buildings sold declined to $205 PSF in Q1 from $257 PSF in Q4 and $212 PSF in Q1, 2013. Still, several trophy properties changed hands including Tower Burbank and Westlake Park Place.

Industrial Absorption Rises to Pre-Recession Levels and Vacancies Fall Below 4 Percent

Following four quarters of robust leasing activity, absorption has risen to pre-recession levels and vacancy has fallen to the lowest levels the market has seen since 2009.

With little new construction and a resurgence of demand for industrial space, the upward trajectory of the Los Angeles North industrial market seems here to stay, at least for the time being.

Some 1,100,404 SF of industrial space was leased in the quarter, bringing vacancy levels down to 3.8 percent, the first time vacancies have fallen below 4 percent since the fourth quarter of 2009. Current vacancy levels have fallen 40 basis points (bps) compared with the prior quarter and year ago period, which both registered vacancies of 4.2 percent.

Not surprisingly, leasing velocity has slowed somewhat from the prior quarter when 1,475,538 SF of space was leased, as well as the year ago period when 1,824,794 SF was leased as options for businesses become extremely constrained. Eight of the 13 Los Angeles North submarkets now are operating with vacancy levels below 3 percent. In the North Hollywood/Universal City submarket, vacancy is 0.9 percent. In Northridge it is 1.2 percent and in Reseda/Tarzana it is 1.5 percent. Only the Antelope and Santa Clarita valleys show vacancy rates above 5 percent.

On a net basis, some 625,600 SF of industrial space was leased, more than in any quarter since the first quarter of 2006 when 645,688 SF of space was absorbed. Admittedly, we are still seeing some fluctuation in absorption rates, and negative 135,923 SF was registered in Q4, but given the solid leasing activity, the volatility is more likely due to the lapsed time between space leased and occupied.

Similarly the sales sector was more active than it has been in any first quarter since 2009 with 23 industrial buildings changing hands in the quarter. The median sale price rose 19 percent to $130 per square foot, compared with $109 per square foot in Q4.

Although there are still some distressed assets being cleared in the region, their numbers are minimal. In the current quarter, just two distressed properties changed hands, compared to six in the first quarter of 2013.

Q4 San Fernando Valley Office and Industrial Market Report

Vacancies Decline to Lowest Levels in More than Four Years as Leasing Activity Remains Brisk

Office leasing activity spiked again in Q4 to 1,359,421 square feet, the highest levels in the past four quarters. In all, 4.6 million SF of space was leased in 2013, the second straight year of solid activity. (Last year, 5.3 million SF of office space was leased in the region.)  

A total of 272,000 SF of office space was absorbed in the quarter, down 30.5 percent from 391,444 square feet in the prior quarter. For 2013, a total of 241,400 SF of office space was absorbed, also down from 2012 when just over 1 million SF of space was absorbed.  

While there is some evidence that at least a portion of the activity in the market represents tenants trading off one space for another, it is also clear that the market’s inventory of office space is slowly filling up.

Vacancies, which have been trending downward for over a year now, dipped to their lowest levels since Q1 2009. The vacancy rate in Q4 was 16.2 percent, an improvement of 50 basis points over Q3 and 40 basis points over the year-ago period. Vacancies in the Los Angeles North market have declined more than 200 basis points since Q4 2011.

With landlords still facing competition for tenants, we are not seeing the tighter vacancy rates reflected in rental rate growth. Average asking lease rates fell by $0.01 to $2.24 per square foot in Q4, and are up by $0.02 per square foot compared to Q4 2012. It is important to note however, that some submarkets are showing rates well in excess of those levels, and we are seeing variations from one building to the next, even within the same submarket, depending on individual factors impacting each property.

Sales activity picked up dramatically compared to 2012. A total of 49 office buildings were sold in 2013 compared to 2012 when 26 office buildings were sold. The median price of buildings sold in 2013 was $186 per square foot, however, the full-year median sale price was adversely impacted by the first half of the year, and prices have been increasing significantly since then. The median price of buildings sold in Q4 was $255 per square foot, a 12 percent increase over the prior quarter.

Economy at a Glance

INVESTMENT: Record highs in the DJIA index and strong stock market returns along with low inflation and minimal interest rate increases are driving near-record high real estate prices, according to a report in Commercial Real Estate Executive. The story cited $660 PSF paid for the Hollywood & Highland Center in L.A. among others.

RENTS: Brokers polled by National Real Estate Investor expect the national office market to shift in favor of landlords in 2014. On a national basis, the office market has registered occupancy gains for 14 consecutive quarters, vacancy fell to 15.1 percent and lease rates inched up 3.5 percent in the fourth quarter of 2013, CPE reported.

STUDIOS: Warner Bros. topped the worldwide box office in 2013 with $4.95 billion in sales. Walt Disney Co. was second with about $4.68 billion in sales and Universal City was third with $3.68 billion in worldwide sales.

RENEWALS: Companies are using lease renewals as an opportunity to downsize in order to conform to today’s workplace dynamics, National Real Estate Investor reported. The office space utilized per employee is estimated to have fallen to 172 SF from 255 SF in 2000 and estimates are that space used per employee will fall to 145 SF by 2018.

 

Extremely Tight Market Limits Options and Curtails Leasing Activity

Following three very busy quarters that removed a good deal of the industrial inventory from the Los Angeles North market, industrial leasing activity slowed in Q4, declining more than 60 percent compared to Q3 and off 22 percent from the comparable year-ago period.

A total of 943,620 square feet of industrial space was leased in the quarter, compared to 1,539,000 square feet in Q3 and 1,213,000 in the fourth quarter of 2012.

The strong activity that preceded the fourth quarter has brought vacancy rates down and limited options for businesses. Overall, the vacancy rate for the current quarter was 4.1 percent, unchanged from Q3. It is also noteworthy, however, that seven out of the 13 submarkets in the Los Angeles North industrial market finished the year with vacancy rates under 3 percent and vacancies were below 2 percent in several markets.

In Woodland Hills, where much of the industrial inventory has been converted to multifamily use, the industrial vacancy rate is 1.4 percent. Glendale’s vacancy rate is 1.7 percent and the North Hollywood/Universal City submarket has a vacancy rate of 1.9 percent.

Just 23,300 square feet of industrial space was absorbed in the region, compared with 488,300 square feet in Q3 and 551,766 square feet in the year-ago period. Chatsworth experienced the highest absorption rate for the year with 695,000 square feet of industrial space absorbed

With so little space available, asking rents rose to $0.63 per square foot in the quarter, a penny per square foot more than the prior quarter and a $0.03 increase over the year ago period. At $0.63 per square foot, asking rents are the highest they have been since Q3 2007 when the rate averaged $0.75 per square foot.

As the industrial market came back with a vengeance so too did sales activity. There were 86 industrial buildings sold in 2013, the largest volume of sales since 2006 when 118 buildings changed hands.

Median sale prices, however, are still lagging the activity we are seeing. In 2013, the median price of buildings sold was $109 per square foot, off 20 percent from the height of the last real estate cycle when the median industrial building price was $137 per square foot.

Economy at a Glance

GDP: The Commerce Department revised third quarter economic growth to 4.1 percent, the strongest growth in nearly two years, the New York Times reported. Previous estimates were 3.6 percent. The increase was attributed to a rise in healthcare, housing and cars as well as exports, state and local government spending and investment in new factories and inventories.

BENTLEY: A record 10,120 Bentleys were sold last year, the luxury maker’s best performance in its 95-year history, according to a report in Bloomberg Businessweek. Bentley said the stock market run-up fueled some of its sales increases, but the company also rolled out a new, lower priced model at the bargain price of about $200,000.

DEMAND: Industrial demand is expected to remain strong over the next two years, with availability rates nationally falling to 11.1 percent, according to CBRE research reported in GlobeSt. Researchers anticipate that the demand will drive rent growth of 4.4 percent in 2014 and 4.6 percent in 2015.

FILMING: L.A.’s location film production increased 19 percent last year to 6,972 days for features and 11 percent to 18,590 days for television, compared to 2012, the Los Angeles Business Journal reported. Commercial shoots were up 5 percent for the same period. The bad news? L.A.’s feature film production is down 50 percent from peak levels in 1996 and TV production is off 38 percent from its peak in 2008.

Woodland Hills Office - Carlton Plaza Impressive Lobby

Carlton Plaza office in Woodland Hills welcomes you to the newly remodeled lobby. The moment you step inside this class A office building, the modern décor welcomes you and your guests to Woodland Hills premier office building on Ventura Boulevard.

Carlton Plaza office in Woodland Hills understands that managing office building in the most efficient way mutually benefits both office tenants and landlords.  We pride ourselves in keeping up with the latest knowledge and practical applications in modern building technologies and infrastructure.  In the remodeling process of the lobby, healthy indoor environments was to be priority on the list of recognized points of interest.  Our human senses play a large role in determining the quality of our environment.  Visually, the lobby’s natural color tones and touches of wood elements with natural lighting against the white seating areas and dark accents, creates a smooth transition from outdoors to an indoor environment. The high ceilings at the entrance creates efficient utilization of useable space with a sense of more open space than actual.  The modern touches of building lighting that project soft light tones blends with the natural lighting in an efficient manner.  Also to include, the latest addition was the interactive touchscreen building directory.  The digital directory is an efficient system informing and managing visitors to navigate though the tenant directory, management, leasing contacts, and additional amenities available in the building.  We hope to see you on your next visitation or leasing opportunities as they arise.

http://woodlandhillsoffice.com/2013/09/28/carlton-plaza-office-woodland-hills-office-impressive-lobby-ventura-boulevard/

http://woodlandhillsoffice.com/2013/04/16/carlton-plaza-office-new-lobby-new-look/

San Fernando Valley Industrial and Office Q2 Market Reports

Industrial

Activity Is Light As Inventory Remains Extremely Constrained

Lack of spaces suited for today's manufacturing and warehousing needs has resulted in vacancies below 5%. Rates have modest increases by $.01 to $.61 per square foot per average quarter. Of 33 industrial buildings that sold the median price was $116 per square foot, up 13% from Q1.

Q2 2013 San Fernando Valley Industrial Market Report (Click Link For Report)

Office

Leasing Activity Weakens But Low Interest Rates Push Sales Velocity

Office spaces remain sluggish in Q2 with no significant changes from Q1. Vacany rates relatively unchanged at 17%, but better by .08% a year ago. Leasing activity are companies trading spaces in the area. Rent are up about $.03 from a year ago. There were 18 offices sales this quarter with a median sales price of $183 per square foot.

Q2 2013 San Fernando Valley Office Market Report (Clink Link For Report)

Q1 2013 San Fernando Valley Industrial Market Report

Q1 2013 San Fernando Valley Industrial Market Report (Click Here)

Q1 2013 San Fernando Valley Office Market Report

Q1 2013 San Fernando Valley Office Market Report (Click Here)

West Hills School Campus Available for Lease - Classroom Tour

A unique opportunity to lease a West Hills school campus. The school campus is comprised of multiple buildings with a variety of uses and flexibility. Additional space can also be available for lease. The West Hills school campus is set up with administration offices and classrooms that have a variety of uses. This beautiful West Hills school campus offers strong demographics, abundant parking, secured access, outdoor activity areas and well manicured landscaping. Please do not disturb the tenant. Tours are by scheduled appointments only. For more leasing information or to schedule a tour, please contact Lee & Associates -- LA North/Ventura, Inc., Eric Nishimoto 818.444.4984

Woodland Hills Office Duplex For Sale - 21051 Costanso St, Woodland Hills

Q3 2012 San Fernando Valley Industrial Market Report

Q3 2012 San Fernando Valley Industrial Markert Report (Click Here)

Rent Woodland Hills Office Space On Ventura Boulevard Ground Floor Space Available

Rent Office Space in Woodland Hills at Carlton Plaza on Ventura Boulevard.

http://woodlandhillsoffice.com/