Tightening of Office Vacancy Rates Foreseen

The limited amount of new construction and the steady pace of absorption will result in a “tightening up” of San Fernando Valley office vacancy rates from the current 18%-19% level, according to a survey by Beitler Commercial Realty Services, Sherman Oaks.

The survey covered 183 buildings in the West Valley and 70 in the East Valley, with a total of 16,470,320 square feet, 13,322,050 of which was occupied, according to the firm’s Jeffrey Woolf.

“Given the limited amount of new construction (about 400,000 square feet in 1987) and the steady pace of absorption, the demand will soon outstrip the supply available to commercial office users,” Woolf said.

According to Beitler’s survey of buildings larger than 40,000 square feet, overall Valley absorption increased by 451,200 square feet between September, 1986, and February, 1987. Currently, space is being leased at about 900,000 square feet per year.