Supply Crunch Feared as Conejo Valley Rapidly Absorbs Space

Activity has picked up in the Conejo Valley, with new construction, higher lease rates and a revival of the office condo market all pointing to a coming supply crunch. Tenants took 90,800 square feet off the market during the fourth quarter, according to data from Colliers International. Vacancy fell to 14.9 percent, compared to 16.3 percent in the previous quarter and 17.8 percent a year earlier. Asking rents jumped up a nickel to $2.22. Mike Foxworthy, executive vice president at brokerage Daum Commercial in Camarillo, sees landlords giving fewer concessions to tenants and he predicts rising rents in the months ahead. “In 2008, I never thought this day would come, but I see a shortage of quality product in the near future,” he said. “That will only put pressure on rental rates.” The largest deals in the quarter basically maintained the status quo, while a host of smaller deals moved the needle. For example, Urban Lending Solutions, a Broomfield, Colo. servicing company for mortgages, bought the Westlake Village loan service operation at Bank of America that handled loans. The new owner decided to keep the operation’s 75,000 square feet at 30870 Russell Ranch Road. “For the common eye, it looked like nothing took place, but a 10-year lease was signed that kept a lot of space off the market,” Foxworthy said. Among the smaller deals, Hogan Insurance Services Inc. took 5,500 square feet at 2801 Townsgate Road in Thousand Oaks. And Montecito Bank & Trust took 3,250 square feet at Camarillo Business Center at 770 Paseo Camarillo in Camarillo. In Simi Valley, American Martial Arts Academy bought a standalone building with 11,500 square feet for $2.85 million. The company plans to add another 7,500 square feet to provide students with a giant dojo at the 15 McCoy Place location. Gary Seaton, vice president at NAI Capital who brokered the sale, said activity has picked up in the market. “There’s more confidence in the economy and that’s allowing for opportunities to present themselves to new retail tenants and multifamily developers,” he said. Seaton said he’s working on permits for two apartment projects that together have 625 units, another sign the market is strengthening. Meanwhile, Foxworthy sees growing interest in office condos, a product type that virtually disappeared during the recession. He represents The Ridge, a condo project at 30200 Agoura Road that started in 2011 with 40 units and has only 15 left. Prices range from about $400,000 to $1.8 million, with an average around $400 a square foot. Buyers include attorneys, CPAs, dentists and small tech companies. “SBA financing was a real help in selling these units. The majority of them used the SBA, which will finance up to 90 percent, including improvements,” he said. On the industrial side, construction has started on a 93,000-square-foot building near Camarillo Airport. The warehouse at 701 W. Ventura Blvd., a project of Quattro Development in Oxnard, will have eight loading docks and 28-foot ceilings. It is scheduled to come on the market in the first half of the year. Also, work continues on the next phase of the Westlake Park Place at 3043 Townsgate Road. The first five-story, 102,000-square-foot building is 80 percent preleased and will be ready for occupancy in February. A second three-story building of 60,400 square feet has a sky-high asking price of $3.25 a square foot. But it will arrive just as demand surges, believes Foxworthy, the buildings’ leasing agent. “It’s in steel right now and will come online in October,” he said. “It’s perfect timing.” – Joel Russell Main Events Westlake Village City Center sold in October for $12 million. The 66,000-square-foot office building, located at 31111 Agoura Road, was purchased by Pacifica Real Estate Group in Santa Barbara. Tenants include Merrill Lynch Wealth Management, Applied LNG Tech USA LLC and Massachusetts Mutual Life Insurance Co. The seller was Zurich North America in Schaumburg, Ill. Urban Lending Solutions bought the operation at Bank of America that handled loans in Westlake Village, and at the same time signed a new lease for the operation’s offices. The 75,000-square-foot deal for three floors at 30870 Russell Ranch Road covers 10 years, but rental rates were not disclosed. The building is owned by IDS Real Estate Group in Los Angeles. Cydcor relocated to Agoura Hills, signing a 10-year lease for approximately 40,500 square feet at 29899 Agoura Road . The outsourced salesforce company previously was at 3011 Townsgate Road in Westlake Village. Financial details were not disclosed. Dollar Tree Inc. leased 21,400 square feet at Mission Bell Plaza in Moorpark. The property at 543 W. Los Angeles Ave. is owned by Safco Capital Corp. in Los Angeles. Other tenants include Wells Fargo & Co., RadioShack Corp. and AutoZone Inc. An industrial building at 31240 La Baya Drive in Westlake Village sold for $3.2 million. The 23,100-square-foot warehouse was bought by owner-user Johnstone Supply, an HVAC equipment wholesaler based in Portland, Ore. Conejo Valley Office Market At a Glance Inventory 6.46 million square feet Under Construction 178,700 square feet Class A Asking Rents $2.22