Commercial Real Estate Hits Bottom, Experts Say : Economy: Bankers, builders and brokers differ on the industry’s recovery rate. Even the optimists are cautious.

Bankers, brokers and economic forecasters said Thursday that the commercial real-estate market has hit bottom in Ventura County, although they differed over how fast the industry would recover.

Although many retail stores and office and industrial buildings still remain partly leased or empty, brokers at Grubb & Ellis, a major commercial broker, said in a quarterly report that they have been seeing more people looking to rent or buy properties recently.

In the past six months, Grubb & Ellis broker Eric Voulgaris said, 617,386 more square feet of industrial space was leased than was vacated countywide. That was a marked turnaround from the first six months of 1991, when 109,386 more square feet of space was vacated than was leased.

Ben Bartolotto, research director for the Construction Industry Research Board, collects statistics on Ventura County. “Things are moving in a direction of improvement. Vacancy rates are dropping. We will come out of this recession.”

But one of Grubb & Ellis’ major clients disagreed, saying he believes that the market is still in a downturn.

Developer Jack Priske called himself a realist. “I don’t think we’re there yet,” said Priske, president of Priske Development Inc. in Ventura. “I know we’re not. . . . We see office vacancy still extremely high and no immediate turnaround. Very honestly, I see a very slow recovery of three to five years.”

Priske said some of his industrial and retail properties are cheaper than they were three months ago, and he believes that the prices could fall still lower.

Jay Berger, a professor of real estate at Cal State Northridge who monitors Los Angeles and California markets, joined Priske in his pessimism.

“We may be at the bottom of the market, but I don’t know when it’s going to get better,” Berger said. “Everything I’ve seen and everything I’ve read says the office (market) is bad.”

Even the optimists were cautious Thursday.

Jessy Crumbaugh, a senior vice president in the mortgage department at Ventura County National Bank, said consumers are easing back into the real estate market, “but it’s a very, very slow market.”

Hank Urbach, vice president of marketing for TOLD Corp. of Oxnard, said, “We feel that the market has hit the bottom in terms of pricing and will probably rock along and start a gradual incline.”

TOLD President Jack Gilbert said a fair amount of commercial space is still available in Ventura County. But, “we’re looking at more in the 24- to 30-month area before we could get back to what we consider normal,” he added.

Gilbert, whose company leases industrial properties, agreed with Grubb & Ellis that more people have been seeking new space in recent months. However, he said his brokers--despite discounts and other incentives offered by owners--are still experiencing “some reluctance to get people to sign on the dotted line.”

Vacancy rates have declined in industrial, office and retail space.

The vacancy rate for the county’s 6.3 million square feet of office space stands at 24.4% this quarter, down from 25.8% in the first quarter of 1992.

The vacancy rate for the county’s 40 million square feet of industrial space is 16.1% today, down from 17.4% nine months ago.

And the vacancy rate for 11.5 million square feet of leased retail space is 9.1%, down from 9.9% a year ago.

With virtually no new construction, the Grubb & Ellis and TOLD brokers agreed that the vacancy rates would continue to decline as more companies move in from Los Angeles and as local firms expand into larger spaces.

Since the riots, the TOLD brokers said, they have made one deal with a Los Angeles client and have forged prospective deals with three others.

So far this year, an extremely low number of permits were issued in Ventura County for $45 million worth of non-residential construction projects, including $16 million in alterations and additions to existing buildings, Bartolotto said. In the same period for 1991, he said, that figure was $62 million.

“We are a bit overbuilt,” said Dirk Kittredge, a Grubb & Ellis research director, “but the real issue is that all of the truly comparable and competitive buildings are being taken off the marketplace and leased. So pretty much what’s left is junk space.”

With little construction in the pipeline, Grubb & Ellis forecaster Bob Bach predicted that vacancy rates for offices will drop by 1% to 1.5% in the next year and that rates for industrial space will show a similar decline.