When is a negative net absorption rate something to celebrate? When that rate is a whole lot better than it used to be.
Though the San Fernando Valley gave back 58,516 square feet last year, that’s indeed good news when compared with 2009, which put 797,477 square feet on the market, according to Grubb & Ellis Co.
Most of last year’s pickup took place in the fourth quarter, when 139,609 square feet of space was absorbed. In turn, the vacancy rate showed improvement, landing at 18 percent, down a half-point versus the prior quarter.
“Things are stabilizing,” said Jim Lindvall, managing director, Jones Lang LaSalle. “Is it a rosy picture for landlords? No. But we’re kind of getting an understanding of where the market now sits, and deals are getting done.”
In fact, all of the Valley’s submarkets experienced a drop in vacancies last quarter, except for the East Valley – including the communities of Studio City and North Hollywood – which saw a slight uptick to 15.6 percent.
The Conejo Valley submarket absorbed the most space, a hefty 73,221 square feet, which knocked vacancies down nearly a point to 17.3 percent. That activity, said Lindvall, can be partly attributed to Bank of America filling vacant Calabasas offices – – which came with its acquisition of Countrywide – that it had temporarily put on the market.
Overall, Class A asking rents in the Valley fell 4 cents to $2.34 per square foot, while Class B asking rents were off by 6 cents to $2.13.
“Lease rates were down marginally but not the decreases we saw in 2009 and early 2010,” said Paul King, a senior vice president with Arden Realty. “There’s increased activity and landlords are feeling a little bit better about the market.”
On the sale side, buyers are indeed out there looking, according to Lindvall. Perhaps more importantly, many owners who’ve been trying to ride out the bad economy are considering selling their properties.
“It’s starting,” he said. “More owners are saying, ‘OK, we now know what the value is, is it a good time for me to exit?’ They recognize they might take a loss, but they’re thinking maybe it’s time to redeploy that capital.”
- Aetna renewed for 27,000 square feet of office space at 6303 Owensmouth Ave. in Woodland Hills from landlord JP Morgan. Financial terms of the five-year lease were not disclosed.
- Software firm Intuit Inc. renewed for 24 months at 5601 Lindero Canyon Road in Westlake Village. The company had previously occupied 60,391 square feet, but will add 11,363 square feet. Arden Realty is the landlord.
- 9535 Reseda Medical LLC bought the Northridge Medical & Professional Plaza at 9535 Reseda Blvd. in Northridge for $9.9 million. The buyer purchased the 34,904-square-foot building from Northridge Medical LLC.
- The Curry Revocable Trust sold a 30,800-square-foot industrial building at 9300-9308 Mason Ave. in Chatsworth to Kolahi Odessa LLC for $3.08 million. The buyer plans to occupy the property, which includes three loading docks and 32 parking spaces.
- Northridge Hospital Medical Center opened the Valley Cares Family Justice Center in Van Nuys, a community service project. The center, at 14535 Gault St., provides services for children and adult victims of domestic abuse and sexual assault.
- Automotive Designs & Fabrication, which does custom van conversions, leased 16,742 square feet at 1516 First St. in San Fernando. Further details were not disclosed.
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