Drop in Vacancy Rates Triggers Construction

Ventura County’s commercial real estate market is off to a brisk start in 1996, with vacancy rates for offices, shops and industrial buildings far below recession-era highs, according to analysts with CB Commercial Real Estate.

Demand for Conejo Valley office space, in particular, has grown enough to spark the construction of new, speculative office buildings for the first time in at least five years, office-space specialist Cathy Condon said Thursday.

“What kicked it off was the earthquake, and it hasn’t stopped,” she said, referring to the 1994 Northridge earthquake, which drove some businesses out of the San Fernando Valley.

“We’ve seen a lot of executives continue the migration from the San Fernando Valley for their residences, and they’re bringing their businesses with them,” she said.

The countywide office vacancy rate stood at 15.3% during the first quarter of 1996, according to the company’s figures. During the depths of the recession, in the fourth quarter of 1992, the vacancy rate hit 24.8%--or nearly one-quarter of all office space standing vacant.

The local markets for retail and industrial space are also showing signs of improved health, with vacancy rates at 6.4% and 9.8%, respectively.

In Thousand Oaks, only 1.4% of all retail space stood vacant at the quarter’s end. During the last year, such national chain stores as Borders Books and Best Buy electronics have charged into the city, lured by its safe environment and prosperous shoppers.

But the boom may soon taper off, said retail real estate specialist Pamela Scott. Thousand Oaks is rapidly running out of undeveloped property with commercial zoning, she said. And many of the chains that wanted to come into the city are now here, she said.

“There’s only so many retailers,” she said.

For the industrial real estate market, the year’s first quarter brought good and bad news. Nestle USA Inc. announced it would close its 594,000-square-foot, food-processing plant in Oxnard. But in March, the same city also saw Haas Automation, a firm relocating from Chatsworth, break ground for its new 415,000-square-foot facility.

Countywide, 596,651 square feet of industrial space, in 21 buildings, were either sold or leased during the first quarter of 1996. Robert Flink, a senior vice president at CB Commercial, said demand for local industrial space is starting to outstrip supply.

“There really isn’t a lot of usable space,” he said.

Although the figures released Thursday by CB Commercial show a healthy Ventura County economy, substantial differences persist between the county’s regions and cities. Although office vacancy rates are falling in the county’s eastern half, for example, they are rising in the west.

Camarillo has been the hardest hit, with 22.6% of office space lying vacant. The city also has Ventura County’s highest vacancy rate for retail space: 14.5%.

“Camarillo was so heavily dependent on defense contracting, and so many of those businesses have shriveled down to nothing,” Condon said.

“Nothing has come in to pick up that space in Camarillo.”