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VENTURA COUNTY BUSINESS | BUSINESS BEAT

Surge Reported in Commercial Real Estate

July 13, 1999|COLL METCALFE | TIMES STAFF WRITER

In yet another sign that the Ventura County economy is fertile ground for growing companies, analysts have reported a strong surge in the Oxnard Plain's commercial and industrial real estate market.

With property prices in the east county at a premium due to shrinking stock, companies pushing for more elbow room and out-of-county firms looking to relocate are taking a much harder look at the west part of the county as a base of operations.

"There is definitely more activity in the market now," said Bob Boyer of CB Richard Ellis, a major commercial real estate firm. "The [Oxnard Plain] has a lot going for it compared to other places. . . . There's more available space, and square footage is coming in a bit cheaper there than in other places."

There is also more speculative development occurring in the area than at any other time in the past decade, he said.

Speculative development--or projects built without lease commitments--is symbolic of investors' comfort with the economy and belief that business in the area will continue to grow.

Although vacancy rates for industrial properties in the west county increased by nearly 3% over the past year, the amount of space that has been leased or sold due to new development is approaching record levels. The industrial vacancy rate in the west county now hovers at about 8%.

Countywide, the vacancy rate is 9.7%, up from 7% a year ago.

Despite that, analysts said the rate of absorption, or the pace by which properties are either leased or sold, has risen dramatically due to the number of new developments that have opened over the last year.

The total base of industrial space in the county grew by more than 2 million square feet over the last year to nearly 53 million square feet. That compares to a base total of 48 million square feet in 1996.

Fueling that activity, analysts said, is a confluence of solid economic and financial factors, including low interest rates, more speculative development, continued economic growth and the availability of more affordable properties.

The market has even prompted some companies to leave their coveted Thousand Oaks, Westlake Village and Santa Barbara addresses to set up shop in Ventura, Oxnard and Camarillo.

"There isn't any one thing that's making all this happen, but each of the factors is pretty important," said Mark Schniepp, director of the UC Santa Barbara Economic Forecast Project. "As the [local] economy grows, there's going to be an even greater demand for commercial real estate, so this trend is kind of logical."

On the whole, Ventura County companies have been prospering, adding workers and expanding their business bases.

But with that expansion have come growing pains as companies seek to match production with demand. Often, that requires more space.

A case in point is West Coast Air Conditioning.

With sales increasing 20% annually, the Oxnard-based air-conditioning installation and maintenance firm was forced to find substantially larger quarters.

The company is now in the process of moving to a 13,000-square-foot building--more than double its previous space--and will begin adding workers to keep pace with growing business.

"It was something we just had to do and wasn't as difficult as we thought it might be," company President Michael Haase said. "The low interest rates and good land price made it a pretty easy decision."

Reaching a growth ceiling because of inadequate space was also what prompted Scholastic Book Fair Inc. to move to one of the just-completed 18,000-square-foot buildings at the Del Norte Business Park in Oxnard.

By September, Scholastic Book Fair, which supplies books for school book fairs in Ventura, San Luis Obispo and Santa Barbara counties, hopes to be fully moved.

"It's pretty much the same story," said Michael Schulze, manager of the company's local branch. "We needed a bigger and better location to serve our customers."

Although the industrial vacancy rate is higher than it was a year ago, analysts agree that it should fall as those properties, many of which are new, begin to fill.

"There has been a historic migration of companies to Ventura County, which at first was really just centered in Westlake Village, but it's moved west," Boyer said. "I don't think that's going to stop. . . . There's a very healthy demand for industrial space in the [west county], and I don't see that changing soon."

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