Office Vacancies Up in Ventura, Down in Valley

The office vacancy rate for the San Fernando Valley dropped slightly to 14% in the second quarter of 1990, while it jumped to 23% in Ventura County, according to a survey by the real estate firm Grubb & Ellis.

“Despite uncertainty in the real estate industry . . . the San Fernando Valley does not seem to be experiencing the severe difficulty that other parts of the nation are,” said Howe S. Foster of Grubb & Ellis.

The vacancy rate “has been fairly flat,” Foster said, pointing out that in the first quarter of the year, the Valley’s rate was 15%, up from 14% in the last quarter of 1989.

But in Ventura County, a large amount of new office space came on the market and pushed up the vacancy rate from 20% in the first quarter. In the second quarter, more office space was available because Chevron Corp. decided not to move into a new 111,478-square-foot office building in Oxnard, as previously planned.

The Valley as a whole performed well, according to one key measure, net absorption, which is the increase in occupied office space during the quarter. Net absorption in the Valley was 468,000 square feet, compared to 148,000 square feet in the first quarter.

The Valley’s office space market was strongest in the East Valley, where the vacancy rate was only 7%.

The East Valley, which covers Burbank, North Hollywood, Studio City and Universal City and has 5.3 million square feet of office space in 55 buildings, had a net absorption of 210,616 square feet during the second quarter.

Foster attributed the strong office rental market in the East Valley to the many movie, television and recording companies in the area. “The entertainment industry is just booming and the capital of the entertainment industry is the east San Fernando Valley,” he said.

In the central San Fernando Valley, which includes Encino, Sherman Oaks, Van Nuys and Northridge, the vacancy rate was 14%. Meanwhile, the net absorption in the central Valley, which has 65 office buildings with 6.6 million square feet of space, was 18,466 square feet.

The news was more mixed in the West Valley, where the vacancy rate was 21%. Despite the high vacancy rate, the area showed a large increase in occupied office space with a net absorption of 253,699 square feet in the second quarter, up from a mere 3,700 square feet in the first quarter.

During the 1980s, the vacancy rate in the Valley soared as high as 21% as numerous office buildings were completed. But Foster said that because of stricter zoning controls, “they simply are not going to be able to build projects as big or as fast as they did in the ‘80s.”

In Ventura County, the net absorption was 26,665 square feet in the second quarter, down from 111,059.

Within Ventura County, the Conejo Valley, which includes Thousand Oaks, Newbury Park and Westlake Village, had a net absorption of 58,193 square feet and a vacancy rate of 20%.

In the Coastal Plain area, which encompasses Oxnard and Ventura, the vacancy rate was 23%, while the amount of occupied office space declined by 47,550 square feet.

In the Simi Valley area--which accounts for only 5% of the office space in Ventura County--the office vacancy rate was 53%.