Last summer, Harout Berberian moved his start-up business out of his North Hollywood home and took up residence in Van Nuys. German Auto Parts Depot was growing. So to help fuel that growth, the owner of the auto parts seller leased nearly 7,000 square feet of industrial space off Sepulveda Boulevard. “We are still growing,” Berberian said. “Now we are going to look at a second (property).” That move — from the home to industrial space — has foreshadowed previous recoveries, said Senior Vice President Jeff Puffer of Delphi Business Properties Inc., who represented Berberian. Puffer and other area brokers say the East Valley industrial market is on the upswing. Concessions have eased and rent should rise about 10 percent in the East Valley by the end of the year as the economy continues to slowly improve, Puffer said. In the fourth quarter of 2011, the East Valley industrial market’s vacancy rate stood at 3.6 percent for properties 30,000 square feet or more, compared with 2.7 percent during the same period a year earlier, according to Jones Lang LaSalle. Average asking rents dipped from 64 cents to 58 cents per square foot a month. But despite that give back, brokers say the market is improving and concessions are declining. “We ended 2011 on a big upswing,” Principal Brett Warner of Lee & Associates-LA North/Ventura Inc. Warner said the firms that survived the recession are now benefiting from decreased competition and are looking to expand as they have taken more market share. “Continued low interest rates and an improved economy have got guys making moves again — they are not sitting idle,” he said. The East Valley is one of the Valley’s oldest industrial markets, sprinkled with aging industrial facilities. But despite the large number of functionally obsolete buildings, brokers say mass redevelopment is far off because landlords still are able to demand enough rent from a plethora of businesses willing to occupy the aging properties with limited parking and low ceiling heights. Having a location that is central for all employees is one key factor in keeping businesses in the East Valley and away from newer markets in the Conejo and Santa Clarita valleys. Early this year, Puffer had a bidding war on his hands while representing the landlord at a Sun Valley property. Two companies were vying for a 42,515-square-foot industrial building at 11651 Sheldon St., landlord Barry Greenberg said. A granite company, Greenberg said, jumped in at the last minute raising the rent for the eventual tenant about 10 percent. After-market auto parts distributor PartsChannel Inc., which signed a 10-year deal, will move into the building in April, Greenberg said.
East Valley Industrial Market to Join Rising Tide in 2012
