Commercial Real Estate Market Up

The Ventura County commercial real estate market made slow but steady improvement in 1993, though robust growth could be as long as three years away, according to an annual report issued Tuesday.

“By all indications, it’s going to get steadily better,” said William Schenck, senior vice president and district manager for the Oxnard office of Grubb & Ellis, a commercial real estate company that issued the report.

In retail, shopping centers with major department stores or discount stores such as Wal-Mart or Target had a 7% vacancy rate, while strip malls and other shopping centers without a major anchor store had a 16.5% vacancy rate, the report showed. The overall retail vacancy rate of 9% is the same as the past three years, retail brokers said.

The industrial market, by contrast, saw vacancy rates drop from 14.7% in 1992 to 12.3% in 1993--the lowest vacancy rate since 1989, Grubb & Ellis brokers said.

Office vacancy rates dipped as well, to 21%, the lowest since 1989 and a six-point drop from a high in 1990 of 27%, according to the report.

Construction of new office, retail, or industrial space is generally flat, brokers said. “Somewhere in the next two to three years, we’ll start to see new development,” said Michael Blahonsky, a Grubb & Ellis broker. “We were late getting into this recession, and we’ll be late getting out of it.”

However, given the history of the commercial real estate market in the last few years, Blahonsky said many such predictions have proved futile.

“We’ve not been through anything like this before,” he said. “The dynamics are such that we just don’t know sometimes. We never thought this was going to happen in the first place.”