Commercial real estate not slowing down

Increasing construction costs, elevated land value, and a diverse tenant population continue to drive the prices higher for commercial real estate in the area.

The Conejo Valley and east to Calabasas is home to about 9.5 million square feet of office space. The rents here remain slightly higher than in other parts of Ventura County because business owners want a Calabasas, Agoura Hills or Westlake Village address, real estate experts say.

But the local office picture could become clouded if the proposed Lowe’s development is voted down by the Westlake Village City Council.

The Lowe’s development is a $45 million project that includes a 168,000-square-foot Lowe’s home improvement store with an adjoining 31,000-squarefoot garden center. In addition to the Lowe’s, Rotkin Real Estate Group plans to develop 62,000 square feet of restaurant and retail space.

Currently, the 22 acres are zoned for 376,000 square feet of office space.

If the Lowe’s development does not pass and the office park is built, the number of office vacancies will increase, experts say.

“If all three developments came on line at the same time, somebody is going to suffer,” said Tom Dwyer, senior vice president for office properties at CB Richard Ellis.“Personally, I think the city of Westlake Village is going to approve the Lowe’s site because they are looking for the tax dollars.”

Dwyer said a recent CB Richard Ellis study shows that the area from Thousand Oaks to Calabasas can absorb about 400,000 square feet of office space per year.

Bill Clark, the firm’s senior associate for office properties, said there was a slight rise in office space vacancy in the East County from 6.2 percent in the second quarter to 7 percent in third quarter. Office space vacancy county-wide remains steady at 8.9 percent, Clark said.

The largest office sales in the Conejo Valley for the third quarter included the purchase of the 110,000-square-foot Agoura Hills Business Park in Agoura Hills and the 159,000-squarefoot Conejo Spectrum building in Thousand Oaks.

The Westlake Landmark, comprising two buildings totaling 180,000 square feet of office space, is currently under construction in Westlake Village. In Agoura Hills, the Lady Face Office Park, a 27,000-square-foot office building, is also under construction. Both buildings are scheduled to be completed by February 2006.

Retail growing

David Rush, vice president of retail properties, said vacancies for stores and shopping centers are slightly lower in the East County for the third quarter. Vacancies dropped from 4.5 percent in the second quarter of 2005 to 4 percent in the third quarter, Rush said.

The largest retail development in the East County is the recently opened 600,000square-foot Simi Valley Town Center in Simi Valley.

The addition of the Wells Fargo Plaza in Newbury Park and the North Ranch Mall in Thousand Oaks were the two biggest retail deals recently in the Conejo Valley, Rush said.

Current development in the Conejo Valley includes the Conejo Valley Plaza in Thousand Oaks and the Shops at Oak Creek in Agoura Hills.

The Conejo Valley Plaza will be the future home to a Sports Chalet store that’s expected to open in May.

Rush said the popular barbecue restaurant Wood Ranch will jump from its current location in Whizin’s Center to the Shops at Oak Creek in Agoura Hills.

Retail space availability, lease rates, construction and land prices have all remained steady for the quarter, while investment activity is slightly up because of the coming holiday season.

Industrial transactions

Harry Preston, first vice president of industrial properties, said the most significant Conejo Valley transaction for the third quarter was the purchase of a 343,000-square-foot building on Lawrence Drive in Thousand Oaks by Pacific Investors. The company purchased a 100,000-square-foot building in Thousand Oaks earlier in the year. Pacific Investors

pent nearly $60 million for both buildings. Available industrial property in the East County dropped 1.3 percent in the third quarter to 8.7 percent, Preston said.