Leftover Tech Space Absorbed By Horde of Expanding Tenants
By DAVID GREENBERG
Staff Reporter
The Ventura County office market showed significant improvement during the second quarter as business expansion absorbed vacant space left over from the tech bust while little new product came on the market.
Second quarter vacancy rates dropped to 10.7 percent from 14.5 percent during the first quarter, with net absorption rising to 341,765 square feet from the first quarter’s 68,547, according to CB Richard Ellis Inc.
A major deal came in June, when Amgen Inc. signed an eight-year sublease from Intel Corp. for an unspecified amount on 200,000 square feet of office space in the Conejo Spectrum complex at 2380 and 2400 Conejo Spectrum Drive in Thousand Oaks.
“Activity is very, very high and it’s across the board,” said Tom Dwyer, first vice president CB Richard Ellis’ office sector.
Brokers were leasing and selling in a market that saw only 62,600 square feet of new space come on line during the second quarter and none in the first quarter not enough to keep up with demand.
The market is likely to ease through the remainder of the year, as several businesses consolidate facilities, brokers said. As a result, they expect the vacancy rate to rise through the end of the year.
Continuing a trend that began last year in both the office and industrial sectors, many investors opted to buy instead of lease buildings to take advantage of the low interest rates.
“If you compare your lease rate to your possible debt service on the same amount of the square footage, the tenant who buys the building could end up saving money,” said Dwyer.
Class-A shell space sold for $167 to $183 per square foot and leased at between $1.80 and $2.15 per square foot full service gross (including taxes, utilities and insurance) during the second quarter.
Silagi Development and Management of Thousand Oaks secured $7 million in sales commitments in June for half the 65,000-square-foot Camarillo Springs Corporate Center complex on Camarillo Springs Road and Ridgeview Street in Camarillo. Construction began in June and is expected to be complete in October.
“We’re anticipating with the interest we have on the units that the balance will go in the next 30 to 60 days,” said Tony Principe, vice president of Westcord Commercial Real Estate Services, which represents the developer and some of the buyers.
Electronic Clearing House, a transaction and processing service provider, will relocate from Agoura Hills to Camarillo after signing a five-year lease for approximately $1.2 million on 20,000 square feet of office space in the Camarillo Business Center at 730 Paseo Camarillo.
Industrial strength
The industrial market showed signs of improvement as well, with the second quarter vacancy rate dropping to 8.4 percent from 8.7 percent in the first quarter.
Most of the sales and leasing deals involved 20,000- to 50,000-square-foot facilities.
But there were some major deals, some involving real estate investors such as E.G. Sirrah, which paid $5.1 million in June to real estate investment group CZX LLC for two industrial buildings at 2259 and 2279 Ward Ave. in Simi Valley. Delphi Business Properties represented the buyer in the deals totaling 77,000 square feet.
Pacific Prime Properties, a West L.A.-based real estate investment company, bought a 104,073-square-foot manufacturing and distribution facility at 1400 Statham Parkway in Oxnard for approximately $5 million from Ransco Industries.
“A 104,000-square-foot transaction is pretty significant for Oxnard,” said Mitch Conlee, vice president of Daum Commercial Real Estate Services, which represented the buyer.
“Ventura County is an area that predominantly caters to small companies. But these companies are expanding locally, which is very good,” he said.
In May, Agoura Sash & Door paid $2.4 million for 21,268 square feet of freestanding industrial space at 2103 Townsgate Road in Westlake Village, purchased from Townsgate Partners. Agoura Sash will use the location for its new headquarters and showroom.
Purchase prices for industrial properties increased about 10 percent from the previous quarter to $70 to $85 per square foot in 10,000- to 20,000-square foot buildings and $65 to $70 per square for space totaling at least 100,000 square feet.
Leasing rates remained stable in the 60- to 65-cent range triple net where the tenant pays taxes, maintenance and insurance on the smaller spaces and 44 to 55 cents on the larger spaces.
Even the less-watched retail market saw vacancies drop to 8.2 percent last quarter, down from 10.9 percent in the previous quarter.
