NOCOUNTY/overview/1stjc/mark2nd
By WADE DANIELS
Contributing Reporter
The stampede of business people searching for industrial and office space outside Los Angeles found pickings increasingly slim during the first quarter in the North County.
While logic may have it that the wide open spaces in Los Angeles’ developing hinterlands would translate to greater availability of industrial space, it’s not the case for the North County, especially in the industrial market, said Madelyn Seyer, research director for Grubb & Ellis Co. in Sherman Oaks.
In fact, she said, the 4.6 percent industrial vacancy rate in Santa Clarita was a hair lower than that of the notoriously tight east end of the San Fernando Valley.
“In terms of the velocity of sales, the numbers probably didn’t rise so fast in the first quarter, but what we have is more people looking and fewer buildings to look at,” said Jim Linn, associate vice president of Grubb & Ellis Co. in Sherman Oaks.
Vacancy of available industrial space was at an all-time low of 1.2 percent in the region’s two largest business parks.
The two parks are collectively known as the Valencia Gateway, and will have a further 600,000 square feet of industrial space completed this year half of which is already leased, said Marlee Lauffer, a vice president with the Newhall Land and Farming Co., which designed the master plan.
“For this type of product (with modern warehouse design and technology), the number of people looking in the market is such that there will still be great demand even when this space opens up this year,” Linn said.
Area companies are looking to places like Santa Clarita for space because the newer facilities are better equipped for their needs. They offer higher ceilings, new technology for higher stacking capacities and more room than older buildings for trucks to maneuver and dock.
Demand for industrial space is so intense, Lauffer said, that about half of a further 600,000 square feet to be finished this year in the Valencia Commerce Center is already leased.
North County’s office market was on the move, but less dramatically. Grubb & Ellis statistics showed first quarter vacancies at 13.3 percent, down from around 17 percent percent in the previous quarter. The area saw 32,000 square feet of net absorption during the quarter in what brokers described as scattered leases and purchases.
The numbers may take a jump later this year with the imminent renovation of a four-story office building into an “upscale” facility adjacent to the third hole of the Valencia Country Club, where the 1998 Nissan Open tournament is slated to take place.
During the first quarter, Woodland Hills-based Realty Bank Corp. readied the 217,000 square foot building, which should be available for occupancy some time in the fourth quarter.
Realty Bank President Norm Kravetz said he already has offers and interest from companies that would fill the Valencia space twice over, though none has yet been closed. Businesses are looking to the North County, he said, because office rents are still 20 percent to 25 percent lower than in those areas.
Overlooking that same Valencia golf course, construction will begin this summer on 400 “upscale” homes for which the City of Santa Clarita gave its approval during the first quarter.
Newhall Land, which has been developing Valencia since the mid-1960s, continued to add new business, breaking ground recently on Town Center Drive, a mixed-use pedestrian-oriented street that will essentially be an extension of its Valencia Town Center shopping complex.
The street will feature a 250-room Hyatt Valencia hotel and a 20,000 square-foot conference center. Ground was broken for both projects during the quarter.
While most of the activity in Santa Clarita continued to focus on Valencia, some developers were looking to other city communities for opportunities.
For example, plans were finalized in the quarter for a cinema and retail center in Canyon Country. The 80,000- square-foot center, with a 10-screen Edward’s Theater and numerous restaurants, aims to save its locals a road trip to Valencia. Ground breaking ceremonies are set for May 19.
“This is the first development in the east area of Santa Clarita for a long time and people shouldn’t have to drive to Valencia for their entertainment, so this will fill a need,” Young said.
In the Antelope Valley, activity remained slow but there were signs of a rebound.
“At least we’re getting calls, which is a big change compared to what we’ve had in the last few years. I think we’re starting a new cycle,” said Ralph Bozigian, co-owner of Mid-Valley Real Estate in Lancaster.
Antelope Valley business leaders are hoping fortunes will improve with a resurgence of aerospace activity. Lockheed Martin Corp. will add 900 jobs to its ranks, thanks to its win of a contract to build the Joint Strike Fighter.
Also, on Feb. 1, the Antelope Valley received the Enterprise Zone designation from the state, allowing for tax incentives to companies for each new job they create.
Major Events:
– RXI Plastics, a manufacturer, leased a 92,000 square foot industrial space in the Valencia Industrial Center. The Calabasas-based Group 100 Corp. brokered the deal.
– The City of Santa Clarita granted permission for the Newhall Land and Farming Co. to build 400 “luxury” homes overlooking the Valencia Country Club’s golf course. Construction will begin this summer.
– Newhall Land and Farming Co. broke ground on Town Center Drive, a mixed-use pedestrian-oriented street linked to its Valencia Town Center shopping complex. Ground was also broken on a 250-room Hyatt Valencia hotel and a 20,000 square foot conference center.
– Harte-Hanks Response Management, the San Fernando-based owner of Inquiry Handling Service Inc. (a direct mail and telemarketing response business), signed a lease for a 115,000 square feet of space in the Valencia Commerce Center. CB Commercial was the broker.
