Office tenants in the San Fernando Valley are loyal to their buildings, leading to low vacancy rates in older buildings and "extremely high" vacancy rates in new buildings, according to Linda Ashman of the Los Angeles office of REIS Reports Inc.
Ashman said the 17% overall vacancy rate in the Valley--"which isn't terribly high compared to many overbuilt locations"--doesn't tell the whole story.
"In marked contrast with other overbuilt areas, most new developments in the Valley have been slow to lure tenants out of older buildings," she said.
"There are a few exceptions, such as the Warner Center (in Woodland Hills) projects, which are leasing up very well," she added.
The study reports that while new construction coming on stream in the Valley this year will decline sharply to 867,000 square feet from 1,760,000 square feet in 1986, in 1988 1,730,000 square feet will come on stream.