Savvy Decisions Pay for Brokers

Executive shifts, office relocations and a strong economy have delivered a high-growth year to companies on the Business Journal’s annual list of Commercial Real Estate Brokerage Firms. Reorganizations and relocations have helped Valley-region brokerages increase their business, according to executives at companies on the Business Journal’s list of Commercial Real Estate Brokerage Firms. The year 2018 has been a robust one for NAI Capital — up mid-year more than 15 percent over the entire 2017, according to Executive Managing Director of Industrial & Investment Group Chris Jackson, who also oversees NAI’s Valencia office. “It’s surprising to me,” Jackson said. “This year was going to be a down year (but) we had a phenomenal two quarters. Multifamily is at an all-time high. They’re still doing deals in a 3 percent growth rate.” Jackson credits the upswing at NAI, the No. 3 brokerage on the list, to the leadership of President Rachel Howitt and Tim Foutz, who became chief executive in 2015. “It helped us out a lot that he is an industrial broker, so he knows how to address the brokers’ needs and make them more competitive,” Jackson said of Foutz. CBRE Group Inc., No. 1 on the list, is also experiencing an extraordinary year in markets north of the 101 freeway. “We are experiencing a strong, stable year,” said David Josker, managing director of the Los Angeles North Region. One evidence of the good times is CBRE’s new Woodland Hills offices; a conversion of a former upscale restaurant. It represents the brokerage’s first office in the neighborhood in nearly two decades, and it has helped brokers access business. “It has exceeded expectations,” Josker said. “We’ve seen very positive momentum.” Josker explained that north of the 101, CBRE agents float between the agency’s main headquarters in a Caruso-converted former Masonic temple in Glendale and the Woodland Hills outpost. “Our professionals are not tied to a desk anymore,” he said. Also, in 2016, CBRE moved its Ventura County branch from Camarillo to Oxnard to maximize its reach up to Santa Barbara. “We’re well positioned to keep our market share there,” said Josker, who characterizes the Ventura County market, despite a sluggish economy, as “fairly stable. Multifamily is growing but slower than Los Angeles and its suburbs.” Motivating CBRE’s presence in Woodland Hills is the Warner Center Specific Plan 2035, which has spurred retail, residential and multi-use development. Josker only expects the local market to heat up as various developments under construction come online and TripleFive executes its intent to build on 47 acres of former Rocketdyne land the Canadian developer purchased in April. “There’s a lot of momentum around the Specific Plan (especially) after (Westfield) opened the Village (at Topanga last year),” Josker said. “We could not be positioned better,” he added regarding CBRE, which has “an existing relationship” with Westfield Corp., which will also overhaul the neighboring Promenade mall. Retail and industrial “The Village has been a transitional project for the San Fernando Valley and has made retail an experience,” agreed Dave O’Connell, director of the Valley division of Centers Business Management, a retail specialist ranking No. 19 on the Business Journal’s list. “High-end retail with the right project can really do well in the (Valley).” Experiential shopping destinations are thriving while strip malls prove reliable racehorses, said O’Connell. In the Valley, CBM’s bread and butter has been retail of the strip mall variety, especially in densely populated communities like Panorama City, Arleta and Reseda. Large square-footage deals with grocery anchored centers and franchises such as Western Dental and El Pollo Loco have been very lucrative for the brokerage. “Restaurant spaces continue to be in very high demand,” O’Connell said. Outlier areas boast even stronger numbers than the Valley. In Santa Clarita, for example, CBM has seen 100 percent occupancy “for the first time in the last eight years” at one location, O’Connell said. “The market has been good up there.” And in Lancaster, CBM just leased a 2,500-square-foot drive-thru (formerly a Burger King) to DJ’s Burgers. In the industrial real estate sector, data from Colliers International, the No. 9 brokerage on the list, show vacancy at 0.9 percent in the San Fernando Valley during the second quarter and even less at 0.6 percent in the Conejo Valley. “The demand is there,” said Josker at CBRE. “When vacancy rate is so low, (lease) renewals tend to be at the forefront.” “But it’s still very competitive right now,” agreed NAI’s Jackson. “There’s not a lot of product available. (As a result, there are) a lot of out-of- market and out-of-state deals.” Jackson, who has been in the industry for 21 years and who also manages NAI’s Valencia office, recently, along with the firm’s Executive Vice President Todd Lorber, recently completed a sale on a 1999-built, 173,056 square-foot distribution and manufacturing space in Valencia for $20.7 million. Locally, “our strongest markets have been Van Nuys, North Hollywood, Burbank and Valencia,” Jackson said. “The West Valley — Chatsworth, Canoga Park — have been slower.”