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Thursday, Mar 28, 2024

Number of Local Leases Doubles for CB Richard Ellis

The region’s largest commercial real estate broker found that there was more activity in leases than sales last year. CB Richard Ellis Inc. came out on top in total value of deals (sales and leasing) in 2010. It also was No. 1 in 2009. The firm tallied $880 million in deals in 2010. While CB Richard Ellis was ahead of other firms in the Valley, its $880 million in local deals was lower than the $1 billion it generated in 2009. Richard Bright, senior managing director for the company’s Los Angeles North operations, said the number of deals in 2010 was equal to pre-recession levels, but transaction values were lower and there were fewer sales. But the number of leases more than doubled to 842 in 2010 from 420 in 2009. “A better percentage of our activity came from the leasing side of the house while sales were less,” Bright said. “There was pent-up demand (for leases) and the deals were expiring and they had to get deals done, although they were shorter-term deals.” Bright said he expects both sales and leasing activity to increase in 2011. CB Richard Ellis had 72 brokers in the San Fernando Valley in 2010, more than any other local commercial brokerage firm listed for that year. The No. 2 firm, Lee & Associates-LA North/Ventura Inc. had the biggest increase in total value of deals, adding more than $250 million from the previous year. That bumped the firm up to second place in 2010 from its previous third-place position. NAI Capital moved from second place to third place. Delphi Business Properties Inc. moved up from 13th place to 10th. Turn of the market Last year was a big year for Sherman Oaks-based Lee & Associates-LA North/Ventura. Its total value in local deals jumped to $635 million in 2010 from $383 the previous year. Activity was up in both sales and leases. “The market started turning primarily due to there being some really great opportunities,” said Mike Tingus, the firm’s president, adding that he noticed the change in October of 2009. “Companies (could) take advantage of the falling market and you were able to move locations, either buying a building or leasing a building, and then companies continued to do the same thing in 2010,” Tingus said. Lee & Associates was able to close some large transactions last year, contributing to its big jump in value of deals. Some of the largest transactions included the sale of the 128,000-square-foot Creekside Executive Center, a business park in Camarillo, for a reported $10.8 million; the sale of a 21.5-acre development site in Agoura Hills for a reported $8.6 million; the lease of a 313,142-square-foot industrial building in Van Nuys for lessor Superior Industries International; and the sale of a 21,676-square-foot office and medical office building in Moorpark for a reported $7.48 million. Diversification Tingus also attributed the company’s success to its market diversification. Encino-based NAI Capital was in third place, with its 2010 total deal values declining to $337 million from $526 million. The numbers of both sales and leases locally dropped by more than half. Michael Zugsmith, the firm’s chairman, said the decline was due to more growth occurring in its “suburban” markets, or in the Inland Empire and in Orange County, than in the San Fernando Valley. The firm also saw more deals occur outside of California. Other factors that complicated the volume of deals locally for NAI Capital were that foreclosed properties failed to hit the market in the expected volume, and many local tenants chose short-term lease extensions over new leases, Zugsmith said. Another notable mover on the 2010 list of the largest commercial brokers is Delphi Business Properties. The Van Nuys-based firm’s value of deals grew by nearly 70 percent, bringing in $124 million in 2010 compared to $74 million in 2009. “I guess we had an increase in number of larger transactions within the firm, but the market is still very soft,” said Ross Thomas, CEO of the brokerage firm. He also attributed the improvement to the work of his brokers, and to the fact that his firm primarily focuses on industrial real estate in the San Fernando Valley. Download the 2011 SFV’s LARGEST COMMERCIAL REAL ESTATE BROKERAGE FIRMS list (pdf)

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