3rd-Quarter Office Vacancy Rate Falls to Its Lowest Point Since 1988 : Real estate: A report says recent construction was relatively light and that the amount of space being built is the least of any major Southland market.

The average office vacancy rate in the San Fernando, Conejo and Santa Clarita valleys in the third quarter fell 0.4 percentage points to 13.6%, its lowest point since the end of 1988, the real estate firm Grubb & Ellis Co. reported.

The company said 2.95 million square feet of office space was vacant out of a total available of 21.7 million square feet.

The decline reflected strong “net absorption,” or an increase in occupied office space, in the central part of the San Fernando Valley, which includes Encino, Sherman Oaks and Van Nuys, Grubb & Ellis said. The openings of the 91,000-square-foot Industrial Bank Building in Van Nuys and the 45,000-square-foot Home Plaza Building in Sherman Oaks contributed to the gain.

The office vacancy rate provides a clue to whether there is a glut of office space available in the region, whether it’s priced at levels attractive to business, and whether new construction of offices is keeping pace with companies’ expansion plans.

In the latest quarter, completed new construction was relatively light at 197,000 square feet, and much of that space was pre-leased before the buildings opened, Grubb & Ellis said. There is an additional 1.3 million square feet currently being built, which is the lowest of any major market in Southern California, the company said.

The market “performed at a consistent level of absorption” in the third quarter, Howe S. Foster, senior vice president in Grubb & Ellis’ Sherman Oaks office, said in a statement. “It has now held steady in the 13% to 15% range over the last year.”

The rate has generally stayed below 15% for the last three years after soaring to 21% in late 1986, when a rash of new office complexes were built. The rate then dropped as low as 12% in late 1988 before climbing back to the 13% to 15% range.

The Region’s Office Vacancy Rate Source: Grubb & Ellis Co.