Economists are predicting job growth in Ventura County will gain steam in 2012, but don’t look for that to leak over into the commercial real estate markets until 2013.
That was the word from CBRE brokers at the 2012 Ventura County Real Estate & Economic Outlook on Feb. 3 at California Lutheran University.
Tom Dwyer, a vice president and office broker at CBRE, said that Ventura County’s office market saw vacancy rates remain flat and asking rents dip in 2011 — a trend that’s likely to continue this year. Asking rents will likely fall by another 2.3 percent this year, he said, even though no new office space is likely to come into the market. Effective rents aren’t expected to reach their pre-recession peak in CBRE’s five-year forecast horizon.
The office vacancy rate for Ventura County ended the year at 23.8 percent — a 40 basis-point increase during 2011.
The outlook does look brighter on the industrial side. Activity in the market for industrial space picked up during 2011, according to Paul Farry with CBRE. New leases and user sales activity climbed 20 percent in the fourth quarter of the year, and are up 26 percent year-over-year.
Even so, the industrial market is still seeing downward pressure on lease rates and terms. Farry predicts positive absorption in Ventura County’s industrial market this year, with rents stabilizing in 2013.
Retail remains the wildcard. Last year was “the year that wasn’t,” according to retail broker David Rush of CBRE. The county saw only one retail property sale above 50,000 square feet, and retail vacancy remained flat. East Ventura County has now suffered through four straight years with no improvement in its retail vacancy rate.
Last year, big national brand-name tenants including Borders and Blockbuster Video shuttered doors around the country, leaving gaping holes in shopping centers everywhere. But tenants such as Wal-Mart (which is planning four new stores in the county), Vallarta’s Supermarket and Dick’s Sporting Goods are planning and opening some new stores in Ventura County, offering some bright spots.
DEALS OF THE WEEK
• Speaking of Blockbuster, a South Coast buyer recently purchased the 8,400-square-foot property at 5880 Calle Real in Goleta that was formerly home to the video rental store. The new owner will make numerous improvements to ready the building for lease, according to Radius Commercial Real Estate & Investments. Brad Frohling of Radius represented the buyer in the deal.
• Meanwhile, Steve Brown, Austin Herlihy and Chris Parker of Radius represented the buyer of 1911 De La Vina in the downtown Santa Barbara area. The complex deal was subject to court approval, they said. The small retail strip, which includes about 7,000 square feet of buildings and 20,500 square feet of land, was listed for $1.2 million. Mike Chenoweth, also of Radius, represented the seller.
• Wash Multifamily Laundry Systems signed a five-year lease on 2360 Sturgis Road in Oxnard.
Corey Baggett with CBRE represented the landlord, Sunbelt Entreprises, in the 6,688-square-foot deal.
“Sunbelt has an interesting story – they put a new team together within the company that revamped the way they do business. Their responsiveness to the market has gone up 10-fold, they have become very aggressive with their lease rates,” Baggett said via email.
• CBRE recently brokered a $14.4 million apartment complex deal in Simi Valley.
Oak Tree Apartments, a 94-unit complex at 1700 Yosemite Ave. in Simi Valley, was bought by Davlyn Investments from Griffin Industries in an off-market deal. The price calculates to about $153,191 per unit.
Melinda Russell of CBRE’s Los Angeles North office represented both the buyer and seller. Russell said the deal was a rare opportunity to gain economies of scale, explaining that Davlyn Investments already owns the 86-unit apartment project next door.
It now plans to merge the two sites to create a single 180-unit property by completing an already proven renovation and management plan, according to Russell.
“Davlyn Investments has been pursuing the location for nearly a decade in order to realize the full potential of this community. By creating a single property, they will raise the quality of the project and its amenities, and meet the demands of this rental market where occupancies are in excess of 95 percent,” she said in a release.
• Contact Marlize van Romburgh at [email protected]