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Friday, Jul 19, 2024

Could Sunkist Deal Spread Some Sunshine on Grim Santa Clarita?

The office market in the Santa Clarita Valley continues to have a lackluster year, though a high-profile sale could boost optimism going forward. The market put 5,700 square-feet of office space back on the market, causing the vacancy rate to rise two tenths of a point to 20.6 percent, according to data from Colliers International. But one broker thinks the Santa Clarita Valley is more dynamic than the numbers suggest. “There has been more activity within the past 12 to 18 months than we have seen over the past three years,” said Ryan House, vice president at the Valencia office of Jones Lang LaSalle Inc. And with the August announcement that Sunkist Growers Inc. purchased what will be its future headquarters, things could be looking up for the suburban market. The group bought the 96,115-square-foot LNR Entrada Gateway Center at 27770 N. Entertainment Dr. in Valencia in an off-market transaction from developer LNR Property Corp. of Miami Beach. Financial Details were not disclosed. The cooperative sold its longtime office in Sherman Oaks to IMT Capital Inc. for an undisclosed price in February. The Valencia building is 48 percent leased, with health care wristband manufacturer Precision Dynamics Corp. occupying about 44,000 square feet. Sunkist plans to take the balance. Average asking rents for the submarket was $2.39 a square foot, flat from the prior quarter but a nickel higher than a year earlier. House said prices will continue to rise, tipping the balance of power. “I see it converting to a landlord market, with less concessions, less free rent, less tenant improvements and other costs subsidized by the landlord,” he said. The largest dollar deal of the quarter was on the retail front. In August, the 97,286-square-foot Westridge Village shopping center was bought by Kroenke Group of Columbia, Mo. for $33.5 million. The building was sold by Regency Centers Corp., a Jacksonville, Fla. company that operates more than 300 shopping centers nationwide. The center at 26850 The Old Road is 96 percent leased and anchored by a 51,000-square-foot Albertson’s grocery. Other tenants include a Bank of America branch, BevMo, Starbucks and Panda Express. The center serves the 1,700-home Westridge housing development near the Golden State (5) Freeway. Movement in the Santa Clarita Valley industrial market continues to be in smaller spaces, as there is not a large supply of conventional warehouses. With the bulk of leasing activity for the quarter in the mid-size range of 30,000 to 60,000 square feet, tenants looking for larger buildings with high ceilings were out of luck. “There’s a lack of availability of buildings greater than 100,000 square feet,” said John DeGrinis, senior executive vice president at the Encino office of Colliers. A couple of recent industrial sales showcase the trend. In July, Centre Point, a 27,354-square-foot industrial building was sold to 20758 Centre Point Parkway LLC for nearly $2.95 million. The Santa Clarita building is almost entirely leased by automotive firm Autotech Systems and Accessories. Also in July, an industrial condo at the Valencia Center sold to VSG LLC of Valencia. The 23,176-square-foot space was bought for $2.71 million and is nearly fully leased, with commercial airline product firm Flight Line Products Inc. as the sole tenant. Still, the industrial market was extremely soft, with 146,000 square feet coming back onto the market and the vacancy rate rising eight tenths of a point to 4.7 percent. As a result, the average asking rent inched up one penny to 42 cents a square foot, still the lowest price in the greater Valley region. – Jacquelinne Mejia Main Events Sunkist Growers Inc., the cooperative of citrus farmers, bought an office building in Valencia for its new headquarters in an off-market transaction. The 96,115-square-foot LNR Entrada Gateway Center at 27770 N. Entertainment Dr. was sold by LNR Property Corp. of Miami Beach for an undisclosed price. The Valencia building is 48 percent leased, with health care wristband manufacturer Precision Dynamics Corp. occupying about 44,000 square feet. Sunkist plans to take the balance. In August, the 97,286-square-foot Westridge Village shopping center was bought by Kroenke Group of Columbia, Mo. for $33.5 million. The building was sold by Regency Centers Corp., a Jacksonville, Fla. The 26850 The Old Road center is 96 percent leased and anchored by a 51,000-square-foot Albertson’s grocery. Centre Point, a 27,354-square-foot industrial building was sold to 20758 Centre Point Parkway LLC in July for $2.95 million. The building, constructed in 2002, was sold by Mauricio Hernandez of Sun Valley. The Santa Clarita building is almost entirely leased by automotive firm Autotech Systems and Accessories. In July, an industrial condo at the Valencia Center sold to VSG LLC of Valencia. The 23,176-square-foot space was bought from an unknown seller for $2.71 million and is fully leased, with commercial airline product firm Flight Line Products Inc. as the sole tenant.

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