There was brisk fourth quarter activity in the Tri-Cities market overall, but Pasadena was the clear winner with 233,108 square feet taken off the market.
“Considering Glendale took a whole year to hit 212,000 (in net absorption), Pasadena really clobbered the market,” said William R. Boyd Jr., senior managing director at Charles Dunn Co.
“East Pasadena has started to fill up, but there was absorption across the board and vacancy rates are down,” said John McAniff, managing director at Jones Lang LaSalle Inc.
Data from Jones Lang LaSalle show the vacancy rate in all three markets dropped in 2012, with Pasadena’s fourth quarter 14 percent vacancy rate 2.5 percent lower than the prior quarter’s level. None of the tri-cities matched its performance in 2011, when the region was coming back from recession, but nearly a half-million square feet were absorbed in 2012 nonetheless.
Glendale was the absorption leader for the year, with 212,000 square feet coming off the market, a “huge and encouraging” sign, according to Scott Unger, an associate at Dunn.
“All three cities have great amenities, but when it comes to saving a lot of money, you’re going to save a lot more in Glendale,” he said, where the asking rents dropped to $2.58 a foot in the fourth quarter.
Asking rents in Pasadena also fell six cents from the year-earlier quarter to $2.57 a foot.
Asking rents in Burbank increased compared with the year-earlier period by a dime to $3.38 a square foot, continuing its status as the most expensive market in the market.
Media and entertainment companies are showing an appetite for more space in Burbank, which saw 70,000 square feet taken off the market, but there is uncertainty due to the possible departure of Walt Disney Co. from the Tower, the city’s signature, 32-story office building. Disney has leased much of the Tower’s 465,000 square feet of office space for more than a decade, but it is not expected to renew.
“The disposition is yet to be determined, but it seems pretty clear they will leave the building and scatter people throughout the market,” said Chris Baer, executive vice president at Avison Young.
More space will be coming on the market in Pasadena, as construction has commenced on a Class A, mixed-use project at 1 W. Green St. in Old Pasadena. A development site is also being marketed on Colorado Boulevard directly across from the Pasadena Playhouse, and 150 N. Orange Grove Blvd. home to Avery International, is expected to be sold.
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