Major events in Los Angeles County commercial and industrial submarkets in the third quarter.
A surge of activity in the summer gave the San Fernando Valley office market a much-needed boost, but local brokers say they’re not willing to call it a turnaround just yet.
The activity pushed the market into positive territory in the third quarter for the first time in more than a year. Some 119,000 square feet of space was absorbed and vacancy rates fell half a point to 18.5 percent, according to Grubb & Ellis Co.
“Prior to August there was a big surge of activity. Things slowed down in the middle of August,” said Bob Pearson, executive director of LA Realty Partners. “I think we’re still recovering; while there’s ebb and flow in deal making, there is really no constant activity in the market.”
Most of the new leases were in the Central Valley, including the communities of Encino and Sherman Oaks, where the 103,000 square feet of office space was absorbed.
“That’s one of the largest submarkets in the Valley, with a tenant mix including lots of service industries such as financial services and administrative support,” said J.C. Casillas, associate vice president and client services manager for Grubb & Ellis. “They were among the first affected by the recession and now, as the market is stabilizing, they are among the first to come back.”
At the other end of the spectrum was the East Valley, where the market gave back more than 9,000 square feet. The West Valley absorbed a modest 15,312 square feet.
Even with the overall positive numbers, however, it remained largely a tenant’s market with average Class A asking rents dropping four cents to $2.38 per square foot valleywide.
Office Market At a Glance
Inventory: 28.5 million square feet
Under Construction: 0
Class A Asking Rents: $2.38
- Production & Satellite Services International, a provider of mobile satellite transmission, production and streaming services, signed a new five-year lease for 22,785 square feet of office and warehouse space at 7030 Hayvenhurst Ave. in Van Nuys. The lease was valued at $957,000.
- Woodland Hills Athletic Club took over an existing 18,000-square-foot gym at Warner Center Corporate Park, 20971 Burbank Blvd. in Woodlands Hills. The new five-year lease is worth about $2.7 million.
- Farmer’s Insurance Group relocated to 180,000 square feet at 6303 Owensmouth Ave. in the Warner Center. The firm downsized from the 240,000 square feet it had occupied in Simi Valley. The value of the lease was not disclosed.
- Zebra Technologies relocated from Camarillo to 75,000 square feet in a building at 30601 Agoura Road. in Agoura Hills. The terms and length of the lease were not disclosed.
- U.S. Legal Support Inc., a legal benefit plan provider, signed a new 10-year lease on 11,000 square feet for its records office at 20970 Warner Center Lane in Warner Center. The deal is worth about $2.7 million.
- Selleck Development acquired 21.5 acres of land for commercial development in Westlake Village. The land, originally purchased by Opus Development but later repossessed by the bank, went for $4.8 million with an estimated 400,000 square feet of entitlements.
- Intuit renewed and expanded its lease at 5601 Lindero Canyon Road in Westlake Village. The new space is 70,000 square feet, 10,000 more than the firm had occupied before.
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