VENTURA: New Developments to Increase Already Abundant Office Space

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How much more can the Ventura County office market take?

First, there was the mortgage debacle that imploded Countrywide Financial Corp. Speculation has it that Bank of America, which acquired the housing lender, will put most of Countrywide’s 2 million square feet of space back on the market in early 2009.

If that’s not bad enough, an additional 900,000-plus square feet of new development is coming on line all while the commercial credit freeze shows no sign of thawing.

“The lack of lending options combined with greater owner cautiousness translates to less demand and less activity in the office marketplace,” said Richard Bright, senior managing director of CB Richard Ellis.

A silver lining: tenants looking for space less than 10,000 square feet inked more deals in the third quarter than the first half of the year. “Savvy smaller tenants are taking advantage of more landlord concessions,” Bright said.

West Ventura’s asking rates were unchanged at $2.02 per square foot, while Conejo Valley average asking rates declined to $2.42 from $2.49 per square foot.

Many brokers expect asking rents to drop as fewer lease deals are completed, possibly declining to levels unseen since the Northridge Earthquake and the post-9/11 era.

“It’ll be tough going out there for six moths to a year maybe longer,” predicted John DeGrinis, senior vice president at Colliers International. “No one’s in the mood to grow, and if they are, they’re not in any hurry.”



MAIN EVENTS

– The Johnston Group acquired a 20,000-square-foot office property at 2045 Royal Ave. in Simi Valley for $4.8 million. TJG will convert the property to 100 percent medical use and upgrade the building’s common areas and suites. The seller was not identified.

– Wireless provider and owner-user Verizon Wireless sold its mixed-use office building at 50 Parker Ave. in Thousand Oaks to investor Keith Sinclair of KS-617 LLC. At the time of sale, negotiations were under way with a tenant to lease the entire building.

– Newport Beach-based investor-developer CT Realty Corp. bought the Ventura Professional Center for $11.7 million from Security National Properties Funding II. The three-building property, totaling 113,300 square feet, is situated on 5.6 acres at 5700, 5720 and 5740 Ralston St.

– The National Park Service extended its lease through 2011 at 401 W. Hillcrest Drive in Thousand Oaks. The agency will pay $500,000 in 2009, $525,000 in 2010 and $550,000 in the final year. The Park Service has been at the 17,375-square-foot location since 1998.

– Wi-fi technology designer Xirrus leased 25,000 square feet at 2101 Corporate Center Drive in Thousand Oaks. Terms were not disclosed. The company is moving its headquarters from 370 North Westlake Blvd. in Westlake Village.

– Development continues at the 303,000-square-foot Patriot Commerce Center office-industrial park off the Ronald Reagan (118) Freeway in Moorpark with the expectation of delivering half the space by the first quarter of 2009.



Office Market At a Glance

Inventory: 12.8 million square feet

Under Construction: 909,000 square feet

Class A Asking Rents: West Ventura County, $2.02; Conejo Valley, $2.42

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