The Santa Clarita Valley's stagnant office market got a boost in the second quarter with the announcement that Princess Cruises will relocate its corporate headquarters to Valencia by spring 2001.

The cruise-ship company, which moved its customer service division to Valencia last year, will leave a high-rise in Century City for two new office buildings being developed by Newhall Land & Farming Co. The buildings, with a total of 270,000 square feet, will be located in the Valencia Town Center and feature retail space on the ground floor.

Princess Cruises plans to have a workforce of 15,000 in Valencia by the completion of its move, according to Newhall Land spokeswoman Marlee Lauffer.

"It is indicative of the strong regional economy and job growth occurring in Valencia," Lauffer said.

The overall office vacancy rate in the Santa Clarita Valley remains high, but it did decline during the second quarter to 26.5 percent, from 29.1 percent in the first.

Most of the drop can be attributed to a new building in Gateway Corporate Point. Explorer Insurance occupied 70,000 square feet of an 80,000-square-foot build-to-suit in the business center. Because there is relatively little office space in the Santa Clarita Valley, that lease, plus some smaller deals, was enough to cause the vacancy shift, according to associate David Solomon with CB Richard Ellis.

Despite the high vacancy rate, Newhall Land, which developed most of Valencia and Santa Clarita thanks to its giant land holdings in the area, is having no trouble finding buyers for attractive parcels.

During the second quarter it sold a 32.8-acre parcel of land to JPI, a large national apartment developer, for $32.3 million. The site will contain 900 units when completed.

"That is a new record for Valencia apartment land values," Lauffer said.

The parcel is on Magic Mountain Parkway near the Town Center, an entertainment mall that opened in the second quarter with an 11-screen movie theater and an Imax 3-D theater, operated by Edwards Theatres. Three new restaurants also opened in the complex last quarter, as well as a Borders Books & Music, Lauffer said.

In the Santa Clarita Valley industrial market there was little activity during the second quarter, according to Jim Linn, senior vice president at Grubb & Ellis.

One major transaction was the acquisition by Taitron Components Inc., a semiconductor distributor, of a 46,000-square-foot warehouse in the Valencia Commerce Center for $3.3 million from Clark Management and Development.


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