Much like the nation’s economy, Ventura County’s commercial real estate market is showing some signs of slowing, but real estate professionals say the overall market conditions remain robust.
The office market posted a strong showing in the second quarter, with vacancy dipping to 10.5 percent compared to 12 percent in the previous quarter, according to CB Richard Ellis Inc.
However, retail vacancy edged up slightly from 4.9 percent in the first quarter to 5.1 percent in the second, and industrial vacancy rose from 9.4 to 9.8 percent during the same period.
“We’re in a state of equilibrium for the most part,” said Jerry Pelton, managing director of CB Richard Ellis’ Ventura County office. “Despite new product coming on line, we’re not seeing an unexpected spike in vacancy rates. It was a good solid quarter overall.”
The office market, especially along the Ventura (101) Freeway Corridor in eastern Ventura County remains hot. A recent study by CB Richard Ellis showed that 53 tenants are currently looking for office spaces ranging from 8,000 to 325,000 square feet along the corridor, said Thomas Dwyer, senior associate for CB.
Baxter International Inc., the health care products supplier, is looking for three, 75,000-square-foot office spaces in the Conejo Valley. Such demand has developers scrambling to build more “spec” office projects, which are built without any prior tenant commitments.
Currently, there is 542,000 square feet of Class-A office space under construction in the Conejo Valley alone. “Overall, the office market is on fire, and we’re hoping it will continue,” Dwyer said.
Among the biggest deals closed in the second quarter, Thousand-Oaks-based WellPoint Health Networks Inc. leased 190,000 square feet at the Mission Oaks Business Park in Camarillo, just north of the Ventura Freeway on Camino Ruiz. The owner is Kilroy Realty Corp. Terms of the deal were not disclosed.
Amgen Inc., the Thousand Oaks biotech powerhouse, signed a five-year lease on a 96,000-square-foot office building at 1011 Rancho Conejo Blvd. in Newbury Park in a deal valued at $3.8 million. The company is moving its marketing department there.
ValueClick Inc., a provider of Internet advertising solutions, leased a 23,000-square-foot office building in Westlake Village, which CB Richard Ellis counts as part of its Ventura County turf. ValueClick moved from its facility in Carpinteria. The deal is valued at $1.6 million.
Monthly office lease rates in western Ventura County range from about $1.70 to $2.30 a square foot, full-service gross. But rates along the 101 freeway in the Conejo Valley range from $2.35 to $2.55 a foot, reflecting the premiums that companies are willing to pay to locate along the high-tech corridor, Dwyer said.
The retail market, meanwhile, continues to see significant growth over the long haul but no major deals closed in the second quarter.
Over the past three years, Ventura County has added 1.6 million square feet of retail space to its inventory base, yet vacancy rates remain at healthy lows.
The retail vacancy rate stood at 7.7 percent in the second quarter of 1998, but the rate has steadily declined to 5.7 percent in the second quarter last year and to 5.1 percent in the second quarter of this year.
“It’s a solid sign the retail side of the economy is looking good,” said Carol Schroeder, a retail associate with CB Richard Ellis.
Other than a couple of small transactions, the quarter was quiet. Still a lot of projects are in the works, and Schroeder expects more deals to close in the third and fourth quarters.
Plans are underway to add a Baja Fresh, Payless Shoe store and Starbucks to the Village at Newbury center located at the Ventura Freeway and Wendy Drive. A Home Depot anchors the shopping center.
Construction is underway on an Albertson’s supermarket and Longs drug store in the Newbury Park Place shopping center at Kimber Drive and Reino Road.
In Oxnard, construction is just getting started on Rose Crossing, a shopping center project at Rose Avenue and Gonzales Road that will feature a Carl’s Jr., Del Taco and Ventura County’s first Krispy Kreme doughnut shop.
Meanwhile, demolition work is underway at the Esplanade, Oxnard’s aging shopping center. The former Sears store on the east end of the mall is being removed to make way for big-box retail. Possible tenants include Home Depot, Staples or Bed Bath & Beyond, according to Schroeder.
Monthly lease rates for retail properties in the eastern portion of the county range from $1.50 to $3.50 a square foot depending on the location and property. Rates in the western end of the county, including Ventura, Oxnard and Camarillo, are generally lower, ranging from about $1.25 to $3.25 a square foot, she said.
The county’s industrial vacancy rate, meanwhile, edged up to 9.8 percent in the second quarter, up slightly from 9.4 percent in the previous quarter, according to CB Richard Ellis.
“It’s pretty stagnant,” said Harry Preston, first vice president of CB’s Ventura County office. “(Industrial vacancy rates) are going up a little bit, but it’s nothing to be alarmed about.”
Some areas had particularly high vacancy rates, but that’s due to large properties that have come onto the market.
