"Well, the phones are still working and the doors are still open, so I guess we're doing OK," one San Fernando Valley broker laughed. Barely.

Such bottom-rung expectations are the standard these days, given the "perfect storm" of recession, soaring unemployment rates and tight credit markets that have rained down on Valley sales and leasing.

The area's most desirable submarket, the West Valley, finished the year with a whopping 17 percent vacancy rate, more than six points higher than the same period in 2007, according to Grubb & Ellis Co.

John Battle, founding principal of Lee & Associates-LA/North Ventura Inc., said that it's the sharpest downturn he's seen since a recession during the 1980s.

"We haven't seen the glut of distressed sellers yet, like on the residential side, but it's only a matter of time," Battle noted. "Investors who short-term financed can't replace the debt they're carrying, so it's sell or the banks will come in."

While Class A Valleywide rents only fell six cents from the previous quarter to $2.74 per foot, tenant brokers said that was only because landlords were doling out concessions: six months of free rent, and generous tenant improvement allowances for five-year deals.

Signs of life in the Valley came with some irony. JPMorgan Chase scooped up the Chatsworth campus formerly leased by the ailing Washington Mutual. Of course, the ailing thrift was seized by the feds in late September and sold to Chase.

Office Market At a Glance

Inventory: 28.1 million square feet

Under Construction: 83,840 square feet

Class A Asking Rents: $2.74

MAIN EVENTS

- Huntington Reproductive Center inked a 12-year deal at Encino Arches at 15503 Ventura Blvd. for 17,182 square feet with landlord Domino Realty. The 78,000-square-foot Class A building was formerly occupied by the Motion Picture Association of America. The deal was made possible via a change of use for an incoming medical tenant. Terms were undisclosed.

- A 100 percent-leased, 9,252-square-foot office building at 14101 Valleyheart Drive in Sherman Oaks changed hands for roughly $261 per square foot in the fourth quarter. The seller, an undisclosed family trust, sold the site to CG Investment Group LLC, a user-buyer.

- Countrywide Home Loans, a subsidiary of Bank of America, sold its 86,000-square-foot headquarters at 5220 Las Virgenes Road in Calabasas. Nearby Agoura Hills-based DTS Inc paid $15.6 million cash for the 10-year-old building. The digital technology firm is an industry leader in decoding 5.1 channel surround sound for movie theaters and consumer products.

- Altobelli Jewelers sold its longtime home at 4419 Lankershim Blvd. in North Hollywood to Bloomtrade Property for $1.8 million. The jeweler, a fixture in NoHo for 60 years, announced plans to cease retail operations. The gem seller occupied the ground floor of the 5,406-square-foot mixed-use building, with the upper floor leased to an entertainment voiceover firm.

- CBS Broadcasting Inc. moved into a 12,987-square-foot block of space at 11846 Ventura Blvd. in Studio City. The four-year, nine-month deal was signed with JSBC LLC last year and is part of the company's expansion in the area.

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