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Office vacancy rates hit record high

Santa Clarita is well-positioned for the long term but could see rates higher than 30 percent

Posted: February 5, 2009 11:44 p.m.
Updated: February 6, 2009 4:55 a.m.

For lease signs line up the sidewalk along Smyth Drive in Valencia, Wednesday afternoon.

 

The Santa Clarita Valley office space vacancy rate soared to 26.4 percent in December, the highest rate in 10 years, according Colliers International.

"We are definitely feeling it, we've got more office space and retail space that are vacant due to the economy as well as new developments," said Jason Crawford, economic development and marketing manager for the city of Santa Clarita.

"In office space, we've had several office buildings that were built on spec so those have continued forward and the tenants haven't come yet," Crawford said.

The city's figures, calculated by CoStar Group, show an 18.2 percent vacancy rate for the valley, which includes unincorporated areas.

Crawford said the conflicting figures are due to differences in measurement standards.

Santa Clarita is well-positioned for the long term but is still expected to see rates higher than 30 percent in 2009, reported Colliers, a corporation that keeps tabs on commercial real estate.

Colliers expects rental rates to simultaneously decrease as much as 10 percent.

At a recent business luncheon, Colliers' Kevin Fenenbock said now is the time for tenants to talk to landlords, "who will be more open than ever."

"There's definitely been a lot of additions to the office square footage to new development, which is a good and a bad thing," Crawford said.

Crawford agrees the rates lean in favor of searching tenants.

"Now is really a good time for businesses to negotiate a good lease and be in a location they want to be in, which is not always the case in the L.A. area," Crawford said.

Fenenbock said he expects vacancy to stay high for a while, "unless a miracle happens and we start seeing some big users come in and absorb some space."

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