Vacancy Rates

Office vacancies in the Simi Valley/Conejo Valley area are the highest of any region served by the Los Angeles North office of the Cushman & Wakefield commercial real estate brokerage. Vacancies in the Simi/Conejo area, which includes Thousand Oaks, Westlake Village and parts of western Los Angeles County, amounted to 22% of existing office space during the third quarter. The next-highest rate in the area was 19% in the central San Fernando Valley.

Attorney David Brewer figured it would be a good time to shop for a new office lease--but he had no idea it would be this good. Brewer's law firm is about to renew its lease at an upscale San Diego office building for 15% less rent than it agreed to three years ago. The deal will cap months of shopping and dickering with eager-to-please landlords in the overbuilt San Diego office market.

It's called "sewer service." A landlord or process server draws up eviction papers but doesn't deliver them, as the law requires. The tenant then gets tossed out of the home with little or no notice. The old ploy, a holdover from the days when shady process servers and landlords threw documents in the sewers, has emerged as a major issue in an era of record low vacancy rates and sky-high rents across Southern California.

The San Fernando and Santa Clarita valleys continue to have the lowest office vacancy rate of any major market area in Southern California, according to a report by the real estate brokerage firm Grubb & Ellis. For all of 1995, the office vacancy rate in the San Fernando and Santa Clarita valleys was 13.3%, the report says. That compares with an 18.5% vacancy rate for Los Angeles County and a 17.8% rate for all of Southern California.

There were a couple of snippets of good news for office landlords in a recent survey by Coldwell Banker. The firm's second-quarter survey of county commercial real estate showed that the office vacancy rate declined slightly, to 21.5% from 22% in the first quarter, and the average asking monthly lease rate rose 9 cents, to $1.62 per square foot.

Office vacancies in the region that includes the San Fernando, Santa Clarita and Conejo valleys dropped to 16.8% in the second quarter from 18.4% in the first quarter, according to a report that tracks rental activity of relatively new, well-located and higher rental rate buildings.

The apartment vacancy rate in the San Fernando Valley edged down to 11.1% in late May from 11.3% last year, according to initial data from a survey conducted by the Apartment Owners Assn. of Southern California. The recent Valley vacancy rate compares with a 12% rate of empty apartments reported for the Greater Los Angeles area.

Strong economic growth in Orange County propelled companies to lease larger quarters and, in turn, pushed the office vacancy rate to an all-time low of 8.2% countywide, according to an industry report released Monday. The rate dropped to its lowest level since records were first kept in 1988--even though a spate of new buildings opened to handle some of the demand, according to the report by commercial brokerage Grubb & Ellis Inc. in Newport Beach. Lease rates, meanwhile, rose to a record $2.

The office market in Los Angeles and Orange counties continued to see vacancy rates drop during the third quarter, but tenants remained highly sensitive to rising rents. The overall vacancy rate at the end of the July-September period slipped to 11.5%, from 11.8% at the end of the previous quarter, according to Delta Associates, the research arm of Transwestern Commercial Services. Rents in the area continued to rise 4% to 5% on an annualized basis.

An apartment shortage is fast approaching as San Diego County's population growth continues at 3% to 4% annually, the supply of available land dwindles and building permits become harder to obtain, housing experts say. The vacancy rate at apartment buildings surveyed in fall by the San Diego Apartment Assn. was 5% in the city and 5.4% countywide, contrasted with 8% in the city and 8.9% countywide last spring. Vacancy rates below 5% are considered by many experts to indicate a shortage.