Econowatch

By CHRIS DENINA Staff Reporter The San Fernando Valley apartment market is tightening, according to this month’s Valley Econowatch. There were 16,527 vacant apartment units in August, translating to a vacancy rate of 8.0 percent. That compares with a vacancy rate of 8.5 percent the previous month and 9.7 percent a year earlier. The steady improvement has been mainly due to businesses moving into and expanding in the Valley, said Maya Mouawad, manager of research services at Marcus & Millichap Real Estate Investment Brokerage Co. “Throughout 1997, businesses have been buying previously vacant land and buildings in the Valley,” Mouawad said, pointing to several large employers that have signed leases for space being developed at the former GM assembly plant in Van Nuys. “When you have businesses like that moving into the area, it will bring employment,” she said. And employment means workers are moving into the area, many of whom are renters of apartments. Among the factors contributing to the improvement of the Valley apartment market, Mouawad said, are general population increases, a lack of newly built apartments, and the marketing campaigns that are promoting the Valley as a good place for businesses. “Little by little, the Valley is recovering from the earthquake and recession,” Mauawad said. “Given its location and proximity to L.A. County, it has the character of a residential community, which brings apartment vacancies down.” And that is making Valley apartment buildings more attractive to investors. “The apartment buildings are more attractive because there’s less risk for delinquencies,” she said. “What’s happening in the Valley is a reflection of the overall economy. It’s reflecting that this is a good time to invest. “If all things remain constant, it (the Valley apartment vacancy rate) will probably stabilize below 9 percent.” The Valley’s industrial-market data support Mouawad’s contention that jobs are expanding. The Valley’s industrial vacancy rate as of the end of the third quarter stood at 5.1 percent, down from 6.1 percent in the second quarter and 7.1 percent a year ago. All four of the Valley’s industrial submarkets have improved over the past year, with the East Valley improving the most. Its industrial vacancy rate is 3.1 percent, down from 5.3 percent a year ago.