66 F
Los Angeles
Wednesday, Feb 1, 2023

Brokers Look Forward to New Developments as Supply Dwindles

MZI Healthcare renewed its 6,187 square feet at 28480 Avenue Stanford, United Staffing renewed 2,566 square feet at 28159 Avenue Stanford and Onyx Lending took a new lease for 1,302 square feet at 25060 Avenue Stanford. Terms were not reported.

The Kaiser Foundation Health Plan Inc. renewed for 7,781 square feet at 26145 Carl Boyer Drive in Santa Clarita for disclosed terms.

Third-party logistics company AMS Fulfillment Services leased a 209,744-square-foot industrial building at 29010 Commerce Center Drive in the Valencia Commerce Center. Terms were not disclosed.

Oil- and gas-exploration company California Resources Corp., an Occidental Petroleum spinoff, leased 21,304 square feet at 27200 Tourney Road. The space will house engineers and geoscientists formerly working in Westwood. Terms were not reported.

Beauty supply maker and distributor Agradora Investment Co. leased a 70,805-square-foot industrial building on Avenue Sherman in the Valencia Industrial Center. Terms were not disclosed.

It might be small, but the Santa Clarita Valley office submarket is punching above its weight.

Overall office vacancy is at 14.9 percent, down from 15.5 percent a year ago, according to data from Jones Lang LaSalle Inc. Average asking rates for Class A space rose to $2.36 a square foot in the opening quarter from $2.34 in the fourth, perhaps signaling a push toward the $2.43 seen one year ago.

“The combination of high demand and limited supply is pushing up building lease rates and sales prices,” said Craig Peters, executive vice president with CBRE Group Inc. “Economic expansion is creating need for additional space by many companies.”

Tenants and owners alike are attracted by the comparatively low price of commercial space in the area, easy access to highways and proximity to housing for employees.

“There’s one less large block of space on the market now,” said Ryan House, a JLL vice president. California Resources Corp., the Occidental Petroleum oil- and gas-exploration spinoff, took 21,304 square feet at 27200 Tourney Road in Valencia. House said office vacancy in that market segment was already below 12 percent.

“We’re getting to the point where there aren’t many opportunities for large tenants,” he noted.

Brokers for all types of commercial property have been anticipating several new developments for years and now, with the recovery in full swing and the approval bottleneck clearing out, some of them are finally beginning to move.

The land development process on Gateway V is complete, and building construction should commence in the second quarter. Its four buildings, ranging from 60,923 to 254,890 square feet, should be completed in early 2016.

Grading has commenced at IAC Commerce Center, a nine-building, 1.3 million-square-foot industrial development, and is slated for completion in the fourth quarter. The first buildings, which range from 93,600 to 187,880 square feet, could be completed in the third quarter of next year.

Needham Ranch, a 160-acre development entitled for more than 4 million square feet of commercial buildings, plans to start land development later this year.

After a protracted approval process, brokers can now look forward to Vista Canyon, a transit-oriented mixed-use development approved in December. It’s scheduled to break ground in the second quarter. The first phase will include apartments, retail space and 650,000 square feet of Class A office space, according to Peters.

Also in the offing is the LNR Entrada site in Valencia.

“We feel it’s the right time for additional office space in the market,” said House.

JLL represents the property.

“The new developments will add much needed supply to the industrial and office markets,” Peters noted. “With the Class A office vacancy now below 8 percent, several larger office requirements can only be accommodated in new buildings.”

– Margot Carmichael Lester

Previous article
Next article

Featured Articles


Related Articles