Home prices are high, but what about the area’s commercial real estate?





Rising construction costs, elevated land prices and a broad tenant base throughout Ventura County continue to drive prices higher for renters and buyers, according to experts at the recent Ventura County commercial real estate symposium hosted by CB Richard Ellis (CBRE) in Ventura.

Retail on the rise Although experts predict the number of large transactions will decrease in 2006, retail property in the Conejo Valley remains highly coveted.

Retail real estate availability in eastern Ventura County and western Los Angeles County dropped from 4.3 percent last year to a current five-year low of 4.1 percent, said David Rush, senior vice president for CBRE retail properties.

On the other side of the county, the available retail space fell to a slim 2.4 percent, as compared to 3.7 percent in 2004.

According to Rush, the retail market in 2006 will perform similarly to 2005. Renters will see a downturn in availability, while lease rates, construction activity, land prices and investment activity will continue to rise.

The largest retail project completed last year in Ventura County was the 600,000-squarefoot Simi Valley Town Center. Although much smaller, The Lakes in Thousand Oaks—a 60,000-square-foot retail and restaurant development—was another significant project completed in 2005.

Two of the biggest retail transactions in 2005 included the sale of the El Paseo in Simi Valley for $50.4 million and the sale of the Moorpark Marketplace in Moorpark for $42 million, Rush said.

In Westlake Village, real estate observers are still talking about the collapse of the 227,000-square-foot Lowe’s development on Russell Ranch Road. The project was voted down by the Westlake Village City Council in late January. It’s likely a 376,000-square-foot office complex will be built instead.

Although Lowe’s was a nogo, plans are underway for Home Depot to move into the former Kmart building on Hampshire Road in Thousand Oaks. Rush said Home Depot is negotiating with the city to raze the Kmart building in order to build their own facility.

Currently, the biggest retail development in East Ventura County is the Village at Moorpark by Nearon Enterprises and M.W. Ossola and Associates Inc. The project is a 131,000-square-foot shopping center that will include Chick’s Sporting Goods, Staples and Petco pet store.

Also earmarked for completion in 2006 is The Terrace on Newbury Road in Newbury Park. That property will feature 40,000 feet of retail development and two Marriott hotels.

Office still king

By far the biggest deal to impact office buildings in Conejo Valley last year was General Electric’s purchase of Los Angeles-based Arden Reality Inc. GE’s acquisition, which totaled more than $3 billion, included nearly 1.6 million square feet of Arden office space in Ventura County worth about $300 million.

Vacancy rates for Ventura County offices dropped from 8.6 percent in 2004 to 8.1 percent at the end of last year, said Tom Dwyer, senior vice president for office properties. Additionally, the 603,000 square feet of office space built in 2005 nearly doubled the 2004 total, Dwyer said.

Office space remains in high demand, especially in the Conejo Valley, where vacancy rates dropped from 7.8 percent in 2004 to 7.1 percent in 2005. As a result, lease rates jumped 5 percent last year. Cost per square foot for a Class A office building was $2.40, while Class B building space went for $2.05 per square foot, officials said.

Fifteen of the 19 largest expansions in leased office space occured in Conejo Valley. The biggest was an 88,000-squarefoot expansion by pharmaceutical giant Amgen in Thousand Oaks.

As for office building sales, Conejo Valley far outpaced the rest of the county with seven of the nine largest deals taking place between Thousand Oaks and Calabasas. The top two sales deals included the Agoura Hills Business Park, which sold for $23.1 million, and the Conejo Spectrum building in Thousand Oaks, which sold fo$21.3 million.

The largest office development under construction in the Conejo is the Westlake Landmark, two buildings off Lindero Canyon Road just north of the 101 Freeway in Westlake Village. Owned by IDS Real Estate Group, the two buildings will compromise more than 180,000 square feet of office space.

This year in Ventura County, construction will begin on nearly 1 million square feet of new office space. The largest project is a building on the 27acre property located between Village Glen and Lakeview Canyon Road in Westlake Village. The lot was bought in January by Steadfast Business Properties and Amstar Group for nearly $27 million.

Steadfast and company will build 244,000 square feet of office space in phase one of a plan to eventually build a 4 8 2 , 0 0 0 square-foot office complex consisting of eight buildings. Industrial availability down

Industrial real estate continues to do well in Ventura County.

Long-term availability dropped from 8.8 percent in 2004 to 7.8 percent in 2005, said Paul Farry, senior vice president for industrial properties.

Industrial land sales jumped from 44 deals in 2004 to 68 in 2005, Farry said.

Last year, the largest built-tosuit building was Haas Automation’s new 211,000square-foot facility.

Guitar Center remains the Conejo Valley industrial leader with 96,000 square feet of space.


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