Developers with the Sares-Regis Group are feeling pretty good about the commercial real estate market in western Ventura County. They are feeling so good that they are willing to start building office space now, and worry about finding tenants later.
In a show of such faith, the Irvine-based company broke ground in Oxnard last week on the first speculative commercial venture west of the Conejo Grade in about 10 years.
The planned 40,000-square-foot two-story development will be located at the southwest corner of Rice Avenue and Gonzales Road. The site is across the street from the office towers that made up the Sares Business Center before it was sold this summer to Arden Realty.
A little more than half of the new office space will be filled by the First American Title Co., which will relocate from its Oxnard location on Financial Square Drive.
Executives of Sares-Regis and the CB Richard Ellis real estate group anticipate little difficulty leasing the remaining space prior to the scheduled completion of the project in April 1999.
"We are bullish on the office market's place in the cycle right now--we expect the market to do well for the next couple of years, at least," said Steve Fedde, vice president of Sares-Regis.
"The vacancy rate in the west Ventura County office market is way down," he said. "The strengthening of the economy we have seen in Southern California has made its way to Ventura County."
Low vacancy and a growing economy have combined to create a time that is ripe for commercial development, Fedde said.
"Rents have pushed up enough in the west county market so that the economics make sense to build new buildings," he said. "Other low-rise [developments] in the market are full and rents now justify construction."
Though Sares-Regis officials considered developing the property for some time, Fedde said the company probably would not have made a move yet had it not been for the interest shown by First American Title.
"Their leasing of 50% of the building let us get over the hurdle," he said. "We actually had the building planned prior to talking to First American, but we may have waited longer in the cycle so other [competitive] buildings would fill up even more than they have. But First American needed to have space by April of next year and it was our job to basically help them find space."
First American will occupy the entire first floor of the structure--dubbed First American Plaza--and some minimal space on the upper level. The balance of the building is likely to be filled by a mix of tenants.
Leasing agent Chuck Engel of CB Richard Ellis said he will be targeting professional businesses in his effort to fill the space.
"We'll be looking at attorneys, financial service-related businesses, possibly even some medical businesses with the proximity of the building to St. John's (Regional Medical Center)," Engel said. "Buildings similarly located and with the same style are 95% to 100% occupied so the timing is very good."
Though First American Plaza should be considered a positive sign for Ventura County real estate market, Fedde said, other Ventura County speculative developments may be slow to follow.
"There is additional land available, but both developers and lenders are cautious," he said. "They don't want to repeat what happened in the 1980s, with the overbuilding."