SAN FERNANDO VALLEY: Vacancy Rates Fall Across Valley as Landlords Drop Asking Rents

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The San Fernando Valley made something of a comeback in the first quarter after bouncing along the bottom for months.

Some 268,000 square feet of space were taken off the market after three successive quarters of either minimal or negative absorption, according to Jones Lang LaSalle Inc.

That performance drove down the vacancy rate three-tenths of a point to 17.1 percent, but it came at cost to landlords. Eager to nail down tenants, they dropped average asking rents six cents to $2.20.

“I think it remains a tenants market for the most part,” said Dan Sanchez, an executive vice president at Jones Lang LaSalle’s Santa Clarita office. “We don’t have a tech driver or something that’s driving growth.”

Still, all submarkets in the Valley looked up a bit, from Warner Center in the west, with its concentration of financial firms, to the East Valley and its media and entertainment companies.

Farmers Insurance Group, which is consolidating its Simi Valley employees into Woodland Hills, signed a nearly 27,000-square-foot lease at 6303 Owensmouth Ave. In North Hollywood, reality TV production company Endemol took about 20,000 square feet at 5200 Lankershim Blvd.

Even the Central Valley, home to smaller office buildings filled with tenants from medical professionals to mom-and-pop shops, absorbed some 67,000 square feet of space as businesses expanded.

The Valley also saw some major sales. Three Warner Center properties were sold to a partnership of Oakfield Realty Partners of West Los Angeles and Long Wharf Real Estate Partners of Boston for $26.4 million. The properties totaled 182,000 square feet and were 94 percent leased. And Lowe’s Cos. Inc. sold a Canoga Park office building at 8399 Topanga Canyon Blvd. for $4.88 million to Valley College of Medical Careers, a building tenant that plans an expansion.

Roger Beck, senior managing director at the Sherman Oaks offices of Charles Dunn Co., said well-priced buildings are selling well in the market. “Buyers still want a deal, but they’re willing to move forward now,” he said.

Meanwhile, in the North County industrial market, which includes both the San Fernando and Santa Clarita valleys, sales and lease activity slowed to 2.19 million square feet. But that still drove down the vacancy rate a half-point to 4.3 percent.

MAIN EVENTS

  • Dolores Ponticelli Trust sold a 14,400-square-foot industrial property at 6843 Valjean Ave. to Van Nuys home and audio distribution company Volutone. Industry sources estimate the value of the transaction at $1.75 million.

  • Carmel Partners sold a Mission Hills office building for $5.65 million to Realty Center Management Inc. The 36,000-square-foot Blackhawk Office Building, at 15545 Devonshire St., was 97 percent occupied at the time of sale.

  • Lowe’s Cos. Inc. sold a Canoga Park office structure for nearly $4.88 million to Valley College of Medical Careers, a building tenant. The three-story property, at 8399 Topanga Canyon Blvd., totals 38,113 square feet. The medical career training facility plans to expand to the second and third floors.

  • Cal Net Technology Group, an IT consultancy, moved its headquarters from Northridge to 9420 Topanga Canyon Blvd. in Chatsworth. Cal Net acquired the 18,969-square-foot building for a reported $15 million to accommodate staff growth.

  • Slovin Properties Inc. acquired a Toluca Lake office building for $15.2 million from Cahuenga Plaza LP. The 73,150-square-foot building at 4130 Cahuenga Blvd. was built in 1984 and has subterranean parking for 201 cars.

  • A partnership of Bantry Holdings LLC of Long Beach and Guggenheim Funds of Chicago sold three Woodland Hills properties – 5950 Canoga Blvd., 5955 De Soto Ave. and 21155 Califa St. – to Oakfield Realty Partners of West Los Angeles and Long Wharf Real Estate Partners of Boston for $26.4 million. The buildings, totaling 182,000 square feet, were 94 percent leased at time of purchase.

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