-Oasis Corp. leased 86,970 square feet at Valencia Commerce Center
-PacTen Partners LLC broke ground on its 540,000-square-foot Commerce Pointe
-Centre Pointe Business Park broke ground on its first two spec buildings totaling 70,705 square feet. One of the buildings is in escrow for purchase.
-Canyon Engineering Products Inc. broke ground on a 70,000-square-foot facility at Valencia Commerce Center
-SKN Development broke ground on the final phase of Park One Industrial Center.
Hurt during the summer by reliance on Southern California Edison, which was threatening rolling blackouts, the North County office and industrial markets rebounded a bit in the third quarter.
But despite a pickup in the volume of deals, the Santa Clarita and Antelope valley markets still face some daunting pressures.
The industrial market saw a slight increase in vacancy rates to 8 percent in the third quarter from 7.1 percent in the previous three months. At the same time, the amount of property either bought or leased jumped to 310,288 square feet from 110,511 square feet in the second quarter, according to Grubb & Ellis Co.
While the office market tightened a bit in the third quarter, North County is still looking at vacancy rates of 23.6 percent, compared with 29 percent in the second quarter. Net absorption in the third quarter jumped to 73,478 square feet, from negative 8,977 square feet in the previous quarter, according to Grubb & Ellis.
"A lot of companies that had been delaying decisions are now ready to proceed," said Doug Sonderegger, senior vice president at CB Richard Ellis. "Earlier in the year, there was a concern about the energy issue, and that has all been resolved. Now, there is a feeling of confidence."
Sonderegger said the events of Sept. 11 may chill some deals, but "others will be more active because some businesses might be correlated to defense or have less of an impact as a result of those events. I would think all that will be reflected in fourth quarter."
Activity on the industrial side was paced by an 86,970-square-foot lease in Valencia Commerce Center to Oasis Corp., a manufacturer and distributor of water coolers. The remaining lease and sales for the industrial market were in smaller chunks of less than 40,000 square feet each, said Jim Linn, senior vice president of Grubb & Ellis.
In another substantial deal for the market, American Hakko Products Inc. bought a 40,772-square-foot building in the Valencia Commerce Center an expansion from its 12,384-square-foot space at Valencia Industrial Center, Sonderegger said.
Despite sporting some of the highest office and industrial vacancy rates in the county, spec projects continue to pop up across North County.
With its lease for 12,500 square feet to ACT Litigation Services at Tourney Pointe, an Arden Realty project of 217,000 square feet in Valencia Corporate Center, vacancies at the development have been trimmed to 100,000 square feet.
Most of the third quarter activity was in construction or pre-leasing of ongoing developments. But a few new projects broke ground in the quarter.
PacTen Partners LLC broke ground in August on its 540,000-square-foot spec technology and industrial park within the Valencia Gateway. Commerce Pointe, a $34 million project at Interstate 5 and State Hwy. 126, began construction on its first eight buildings of 234,000 square feet, with the remaining planned for February, said Dennis Fitzpatrick, a partner at PacTen Partners.
In Antelope Valley, SKN Development broke ground on the final phase of Park One Industrial Center, said Nigel Stout, associate vice president at Grubb & Ellis. The 3-building spec project's last building is 24,000 square feet and is scheduled for completion in fourth quarter.
Canyon Engineering Products Inc. broke ground on its own 70,000-square-foot facility at Valencia Commerce Center with a three- to six-month completion date, he said.
Also, Salazar Construction bought a 1.5-acre parcel to build a 27,000-square-foot building at Centre Pointe Business Park, Linn said.
Although ground was broken at Centre Pointe in the second quarter, construction really got underway on the first two spec buildings during the third quarter, he said. One is 33,750 square feet; the other is 36,955 square feet. The latter is under escrow for purchase.
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