Aerospace, Medical Device, Entertainment Sectors Power Up Area

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The industrial-flex market continued to command the spotlight in the Santa Clarita Valley in 2014, while the office sector turned in another steady performance to close out the year.

“Activity is strong due to general economic expansion and primary industry clusters growth,” said Craig Peters, executive vice president for CBRE Group Inc. Interest was driven primarily by strong demand from tenants in the aerospace, medical device and entertainment industries.

“Key drivers were availability of state-of-the-art product and a strengthening economy resulting in occupier expansions,” he said.

The trend lines appealed to investors looking for good deals in the market.

The 90 percent-leased biomedical park at 25155 Rye Canyon Loop traded hands in a multiproperty sale. The Valencia site is fully entitled for additional industrial and office development. MannKind Corp.’s recently retired chief executive, Alfred Mann, sold the property, along with Sylmar Biomedical Park, to Intertext Properties. The deal’s price tag was not disclosed but is estimated to be $112 million; local investment firm Oaktree Capital Management provided financial backing.

New York REIT American Realty Capital Global Trust Inc. purchased the Quest Diagnostics building at 27027 Tourney Road in Santa Clarita for $96 million, or $423.95 a square foot, from New York-based Clarion Partners. The Class A, 226,441-square-foot lab and office facility is fully occupied by Quest, one of the nation’s largest biomedical companies.

Demand for top-tier industrial and office for-lease space continued to outstrip supply, Peters said.

Jones Lang LaSalle reported fourth-quarter office vacancy at 14.8 percent, down from 15.3 percent in the third quarter and 16.3 percent at the close of 2013. The average asking rate for Class A space slid slightly to $2.34 a square foot in the last quarter, lower than the $2.37 it charted in the third quarter the year-ago period.

JLL doesn’t track the narrower Santa Clarita Valley industrial market, but its data for the North L.A. market, which includes the area, show vacancy rates declined to 3.7 percent in the fourth quarter from 5.5 percent a year earlier. Average asking rents increased to 68 cents a square foot in the quarter from 58 cents one year prior.

For example, said JLL Vice President Ryan House, Augusta Financial expanded its space at 25129 The Old Road in Stevenson Ranch and full-service Web design, maintenance and marketing firm Scorpion Design expanded at 28470 Avenue Stanford in Santa Clarita.

“Most leases were smaller in size, less than 5,000 to 6,000 square feet,” said House, who attributed the declining asking rates to the lack of supply in top-tier buildings. Looking ahead, he expects an increase in rates and decrease in concessions.

– Margot Carmichael Lester

Main Event
In October, the IAC Commerce Center broke ground on a 70-acre project adjacent to the Valencia Commerce Center near Highway 126 and Commerce Drive. The development includes nine buildings totaling 1.3 million square feet. Vertical construction is planned for late this year.

The 120-acre Mann Biomedical Park, 25155 Rye Canyon Loop in Valencia, was sold by Alfred Mann to Intertext Properties for an estimated $112 million. Oaktree Capital Management provided financial backing for the 19-building transaction, which also included the Sylmar Biomedical Park.

American Realty Capital Global Trust Inc. purchased the Quest Diagnostics building, 27027 Tourney Road in Santa Clarita, for $96 million, or $423.95 a square foot, from Clarion Partners.

The 14,350-square-foot Class B industrial building at 28895 Industry Drive in Valencia was sold by BMF Holdings to Daniel S. Latter for $2.2 million.

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