There was tenant activity in the San Fernando Valley during the third quarter, but it amounted to little, as companies moved within the market taking advantage of low lease rates.
The result was a vacancy rate that held steady at 17.2 percent, according to Jones Lang LaSalle Inc. Much of the Valley reported incremental give-backs in space, largely offset by positive absorption in the Central Valley. Rents in the region dropped two cents to $2.21 a square foot.
Stacy Vierheilig-Fraser, senior managing director at Charles Dunn Co. in Sherman Oaks, said another reason the deal-making amounted to little was the new austerity in Hollywood.
“Most of what I’m seeing is short-term production deals, and they’re shorter than usual,” she said. “The studios are giving green lights to TV shows for three episodes, as opposed to the normal six to 12, so production companies want leases for less than a year.”
Still, the hottest neighborhood was Studio City, where media companies competed for limited space. Elsewhere, demand remains low, with open space staying on the market for months. “It’s still a renter’s market, that’s for sure,” Vierheilig-Fraser said.
Trevor Belden, principal at Lee & Associates in Sherman Oaks, said he doesn’t expect the Valley to break out of the doldrums until some serious job creation occurs.
“Tenants are renewing for one to three years until they see what the future holds,” Belden said. “We’re all on pins and needles waiting to see some job growth, especially in the entertainment sector.”
Even the biggest deal of the quarter barely moved the needle.
Panavision Inc. leased a 145,000-square-foot building in the Warner Center section of Woodland Hills. The 18-year deal was valued at roughly $50 million. It was a large transaction, but Panavision only moved from one office building to another on the same block.
“It created a vacancy but took away another, so it didn’t move the register in terms of occupancy,” Belden said.
In the industrial market, several large deals around the Van Nuys Airport drove about 1.8 million square feet of sales and lease activity during the quarter. With nothing under construction, that helped push down the vacancy rate in the North Los Angeles industrial market, which includes Ventura County’s Conejo Valley, one-tenth of a percent to 4.4 percent, according to Jones Lang LaSalle.
- Momentous Insurance Brokerage leased 27,682 square feet at 5990 Sepulveda Blvd. in Van Nuys. The price was $2.09 a square foot for 48 months. The building, Tri-Center Plaza, is owned by Jamison Properties.
- Balboa Medical Plaza, at 10605 Balboa Blvd. in Granada Hills, was sold for $8.7 million. The buyer was Sinanian Development, a general construction contractor based in Tarzana. This was a foreclosure sale by CW Capital Asset Management, a commercial lender in Westlake Village. The three-story medical office building has 66,000 square feet of space.
- Cornerstone Real Estate Advisors in Los Angeles sold Warner Business Center in Woodland Hills for $7 million. The 60,000-square-foot building, at 6464 Canoga Ave., was vacant. New owner Emser International, a tile manufacturer and distributor, will occupy part of the property and lease the rest.
- Koops Productions, a reality TV production company, leased 9,000 square feet at 10960 Ventura Blvd. in Studio City. Financial details of the three-year lease were not disclosed. The tenant was eager to get a Studio City address and jumped at the chance when the previous tenant moved to Burbank.
- Aviisha Medical Wellness Institute, a provider of diet and sleep disorder therapies and supplies, leased 12,840 square feet of warehouse space near the Van Nuys Airport. The rate on the 18-month lease was 81 cents a square foot. The one-story warehouse, owned by Flight Facilities in Beverly Hills, is located at 16554 Arminta St. in the Flight Industrial Park.
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