Valley Leads County in Filling Office Space : Real estate: Area’s vacancy rate is 14.9%, survey shows. Good results are attributed to demand from the entertainment industry.

The San Fernando Valley has the lowest office vacancy rate in Los Angeles County, according to an industry study.

A third-quarter survey of commercial office space done by Grubb & Ellis put the vacancy rate in the Valley at 14.9%, down from 16.1% in the third quarter of 1992.

By comparison, the same study found that the vacancy rate in West Los Angeles was 18.6%, Downtown 19.6%, while the South Bay’s rate was a staggering 22.2% for the third quarter.

Grubb & Ellis executives said the Valley’s vacancy rate has not been this low since the first quarter of 1991.

The Valley’s low vacancy rate is largely attributed to the tight rental market in the East Valley, where many entertainment companies are headquartered, and the dearth of new construction in that area over the past three years. If considered alone, the East Valley’s vacancy rate is 7%, said Madalyn Seyer, research director for Grubb & Ellis in Sherman Oaks.

“It’s a growth market in a recessionary economy in the East Valley,” she said. “The entertainment industry is one of the few industries actually prospering in the Los Angeles area. Most of the companies have moved from Hollywood to the East Valley in the past 10 years. The ancillary and support companies are also coming to the East Valley, creating a demand for space.”

In the past, office rents were lower in the Valley in comparison to the rest of Los Angeles County but now Valley rents are on par with other areas of the county and in some cases are higher, the survey found.

Office rents in the Valley average $20.65 per square foot, according to the Grubb & Ellis study. The study found that rents in Westwood averaged $25.96; the Mid-Wilshire district $20.12; Downtown $21.23, and West Los Angeles $21.80.

While the office market as a whole is doing well in the Valley, the West Valley is experiencing a space glut. The vacancy rate there is about 20% and includes 700,000 square feet of new office space that has not been leased in the past three years. About 580,000 square feet of that vacant space is in one of the Voit Towers in Warner Center in Woodland Hills.

“The West Valley is home to many health and insurance companies, which we all know aren’t doing all that well,” said Seyer.

The Grubb & Ellis study found that 541,047 square feet of new office space was leased in the Valley during the third quarter, up from 520,602 square feet that was leased throughout the Valley during the second quarter.

Overall, 2.6 million square feet of office space has been rented in the Valley during the nine months ended Sept. 30, compared to 2.7 million square feet for the same period in 1992.

A second survey done by Julien J. Studley Inc. found higher office vacancy rates throughout the county, including the San Fernando Valley. The Studley study put the Valley’s vacancy rate at 18.9%, slightly lower than the 19.2% vacancy rate it found for all of Los Angeles County.

The studies agreed that, overall, 2.6 million square feet of office space was rented in the first nine months in the Valley.