Although commercial office vacancy rates average more than 30% in the San Gabriel Valley, the market for research and development sites and facilities in the eastern end of the valley is already strong and is expected to grow steadily.
The information on the vacancy rates for the second quarter of this year is from Grubb & Ellis Commercial Brokerage Services, while the optimistic R&D outlook is from arch rival Coldwell Banker Commercial Real Estate Services.
The Grubb & Ellis survey of 39 buildings showed a vacancy factor of 32%, down from 34.5% for the same period in 1984. The latest figures cover 3,313,000 square feet, of which 1,046,000 square feet is available in Covina, West Covina, Monterey Park, El Monte, City of Industry, Pomona and Diamond Bar, according to Jeffrey T. Carey, vice president and district manager of the firm's Los Angeles office.
In 1984, the existing base amounted to 2.6 million square feet, with 891,097 square feet vacant, he added.
"Paced by the rapid growth of the Pomona and Diamond Bar areas along the Orange (57) Freeway, space in the San Gabriel Valley under construction amounts to nearly 500,000 square feet of office and R&D space, all of it coming on line later this year," Carey said.
He added that the second quarter figure is an even greater improvement over the 35.7% vacancy factor recorded for the first three months of 1985.
Gil Bates of Coldwell Banker's City of Industry office said that the region's traditional industrial base is being augmented by more than 1,584,000 square feet of high-tech development already planned for San Dimas, Pomona, Diamond Bar, Glendora and Irwindale.
The largest of these projects is the University Corporate Center in Pomona, being developed by the Macklin Cos. of Newport Beach. When it is completed, the center will offer more than 1.2 million square feet of corporate and high-tech space.
In addition, three major developments offer land sales or build-to-suit possibilities: Crossroads in the City of Industry, with 110 acres and its own ramp on the Pomona (60) Freeway; the World Vision development with more than 80 acres in the upscale college community of Claremont; and Arrow Grand with 18 acres in Covina. Firms that have already purchased land in Arrow Grand include Sensortronics, Select-a-Switch, Telstar and Ameritec, Bates said.
Land prices in the $4.50-$5 per square foot range compare very favorably with rates of $8-$20 in the South Bay, $8.50-$10.50 in Irvine and a hefty $20 for finished land on the Westside of Los Angeles, he added.
But lower land values alone are not forcing the emergence of an R&D market in the San Gabriel Valley; rather it is a function of a change in technology, products and society, he said.
The influence of Pasadena's Cal Tech and its graduates, many of whom have stayed in the area to join or start high-tech businesses is important," Bates said. "Land appreciation in Pasadena has sent many companies eastward along the Foothill (210) Freeway corridor. Prominent among them in recent years are "information generation" companies, such as Home Savings of America with a 300,000-square-foot headquarters in Irwindale; the Federal Home Loan Bank facility in the City of Industry and the Bell & Howell operations in Baldwin Park.
Important factors that make the San Gabriel Valley attractive to developers include freeway proximity, a good surrounding neighborhood, a progressive and cooperative attitude toward development on the part of the local government, amenities such as banks and restaurants and land prices in the $4.50-$5 per square foot range, Bates said.
"Most of the cities in the East San Gabriel Valley offer all of these advantages," he said. While offices and R&D space is important, the role of industry is vital to the San Gabriel Valley, according to Brent Enright, also from the Coldwell Banker City of Industry office.
One major problem is the scarcity of major sites, 20 acres or larger, in the valley. Only 25 sites meeting this description can be identified, with most of them in the southern half of the San Gabriel Valley, Enright said.
The Glendora/Irwindale area is rapidly emerging as a major development location in the valley. Two major developments in Glendora include the $10-million Glendora Commerce Center and the 85,000-square-foot headquarters of Interface Technology.
Two of the seven buildings in the first phase of the Glendora Commerce Center at Allen Avenue and the Foothill (210) Freeway, have been sold, according to a spokeswoman for Coldwell Banker, the marketing agent. The project is being developed by R & P Enterprises, Glendora, and is in the Glendora Redevelopment District. The architect is Don R. Murphy & Associates of Monrovia and the contractor is Keller Construction Co. Inc., El Monte.
The first phase, totaling 87,400 square feet, will be completed by the end of the year, with construction following on the second and third phases next year, according to Donald L. Riggins of Coldwell Banker.