Steady Growth for 2012 Cited at AIR’s Annual Dinner; But no 'Big Pop'
Top Story
2012 promises to see steady growth in the L.A. Metro area’s commercial real estate market. But don’t expect a ‘big pop”. |
That, coupled with investors emerging from the sidelines to snatch up attractively priced properties, comprised the central message expressed by a blue ribbon panel of top producing brokers last week at the 19th Annual “Market Review & Forecast” event presented by the AIR Commercial Real Estate Association in Los Angeles. Over 230 industry professionals attended. |
Virtually each of the nine presenters, who covered the area submarket by submarket, underlined that 2011 was characterized by increasing demand by industrial property users, and that industrial property vacancies declined across the five-county region. |
Commenting on the Orange County submarket, Sean Ward, first vice president of CBRE, said industrial property vacancy rates in Orange County dropped to 2008 levels at 3.4 percent. “Industrial property is trending upward both in lease and sale rates, buoyed by a strong second half of 2011 and a dwindling supply of large spaces. For 2012, industrial rental growth is expected while office product is projected to lag. A strong appetite for acquisition will continue from value added and institutional investors,” Ward said. |
Philip Attalla, senior vice president, NAI Capital, Inc. said the Central L.A. submarket has stabilized and is getting better. He noted that vacancy is down to 3.9 percent from 4.2 percent a year earlier. “The lease rate is leveling or going up. Meanwhile, developers are buying up land in the region paced by large food-related companies. Things are going in the right direction. Increased construction will create market velocity in 2012,” Attalla said. |
Jeff Puffer, senior vice president of Delphi Business Properties, Inc., reported that activity increased overall along with aggressive sale pricing in the Northwest submarket, anchored by the San Fernando Valley. “Business is improving in the region, so we believe that 2012 will be marked by low vacancy rates, a stabilized leasing market with more long-term leases, sale prices declining, and investors coming back to market,” Puffer said. |
Strong absorption of industrial property was experienced in the Eastern region throughout 2011, commented Rustin Mork, senior associate for Binswanger/Realty Advisory Group. “Meanwhile, institutional interest in industrial space is at “an all-time high”, while demand and pricing increased steadily through the third quarter of 2011. “We expect similar conditions in 2012, plus a visible increase in new construction,” Mork said. |
Grant Harris, senior vice president, Lee & Associates-LA North/Ventura, Inc., said the Ventura County region saw activity pick up dramatically in the second half of last year. “It was the most consistent activity I’ve experienced in several years,” he said. Harris forecast steady, slow recovery for 2012 with industrial lease rates and sales prices beginning to stabilize sparked by “a resurgence of high tech companies.” He said vacancy rates for industrial buildings will continue to fall due to production scarcity. |
The Mid-Counties submarket has registered seven straight quarters of positive absorption, declared Chuck Wilson, senior vice president of Colliers International. Wilson said, “the market seems to have hit bottom. We see increasing owner/user purchase demand helped by historic low interest rates, tightening inventory, and investor demand for quality buildings.” |
“Bigger is better in the Inland Empire region where demand for buildings of 500,000 square feet or more was robust in 2011, helping drive down availability and vacancy rates,” said Joey Sugar, first vice president of CBRE. Sugar reported that the availability rate is expected to hover around 11.6 percent throughout 2012 with falling availability rates leading to rental improvements. “Several projects are slated to break ground; however construction is projected to remain relatively low until rental rates rebound.” He said the industrial vacancy rate is 6.8 percent. |
Frank Schulz, vice president for The Klabin Company/CORFAC International, stated that industrial activity is up significantly in the South Bay submarket. He said the vacancy rate is five percent with 1.1 million square feet of space absorbed in 2011. |
“Spec construction – 800,000 sq. ft. underway -- is back in our market. ‘B’ buildings are leasing and this will increase. That’s good news. Also, investors rule in the market today on the sale side, specifically for larger buildings,” Schulz said. He added that lease rates will continue to rise and that owner users “will have a tough time competing with investors for buildings as higher rents and lower cap rates increase the pricing threshold.” |
| Stating that the Westside submarket is primarily comprised of office space, Tibor Lody, vice president of The Klabin Company/CORFAC International, said “Capital is chasing few deals”, and vacancy rates are down – 13 percent for creative office and 15.8 percent for the total market. Lody said the creative office market characterizes the submarket with over one million square feet of this space under construction. |
He said the 2012 forecast underscores continued capital chasing investment opportunities, stable leasing demand for limited supply, a five to 10 percent increase in lease rates, and owner/user purchases continuing to rise. He added that mixed use and multi-family spec development is gaining momentum. |
| Our valued sponsors for the Annual Dinner were Bank of America, California Statewide CDC, CBRE/Valuation and Advisory Services, Commerce Escrow Company, First American Exchange, Prologis, Rexford Industrial, The Rockefeller Group, TMC Financing, US Bank, Saunders Commercial Seismic Retrofit, and CenterPoint Properties. |
| Please click here to view PDF version of the presentation and click here to watch them on YouTube. |
Dave Harding Introduced As New AIR President; Cites Key Goals
Second Top Story
David M. Harding, Senior Vice President in the Universal City, CA office of CBRE and a veteran of over 20 years in commercial real estate, has been elected 2012 president and executive chair of the AIR Commercial Real Estate Association (AIR).
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Harding, who was introduced as president during AIR’s 19th Annual “Market Review and Forecast” last week, succeeds Joseph Vargas, SIOR, executive vice president – regional manager for Cushman & Wakefield, as president and executive chair of AIR. |
Joining Harding to comprise AIR’s executive committee are Corey Spound, Jones Lang LaSalle, president-elect/long range planning; Jason K. Jamison, SIOR, GM Properties, vice president-MULTIPLE director; Joseph T. Faulkner, Cresa Partners, vice president-education chair, and Joseph Lin, Lee & Associates-Ontario, secretary/treasurer-budget and finance chair. Jim McFadden of Grubb & Ellis was newly elected to AIR’s board of directors. |
| Addressing AIR’s annual dinner event, Harding declared that he was genuinely honored to serve an organization that he said has been “for brokers by brokers” for over 50 years. He stated that 2012 “promises steady progress for commercial real estate”, while announcing two key association goals for the new year. |
“We will make certain that WinAIR Forms, the most widely used commercial real estate forms in California and throughout the country, remain the go-to forms in the industry. We expect to deliver an upgrade of the WinAIR Forms software, taking advantage of current technologies that will make the product even more accessible and easier to use,” Harding said. |
| He also announced the continued development and outreach of the AIR’s training program for its numerous broker services, including its CDX property data service. |
| A leading industrial properties broker with CBRE for over two decades, Harding focuses his client services in the San Fernando Valley. |
| A graduate of UCLA with a Bachelor of Arts degree in Economics, Harding is married with three children and resides in San Marino, CA. |
AIRQuality
Jack Karp Garners ‘Lifetime Achievement Award’
| “It’s a distinct honor being recognized by your peers in the brokerage profession.” That’s how Jack Karp, Founder and President of National Properties Group, responded upon being presented AIR’s “Lifetime Achievement Award” along with his wife, Lois, by long-time AIR member Chuckie Lyons during the annual dinner. |
Lyons saluted Karp, a 50-year
veteran of industrial real estate, for his long years of service on AIR’s Forms and Arbitration Committees. “If it wasn’t for Jack, we would not have AIR as we know it today,” Lyons said. |
Accepting the award, Karp cited the many changes that occurred in the profession during his tenure. “Creation and ongoing improvement of AIR’s standard forms were a true highlight. We worked on them for years. As a result, you don’t have the back biting that prevailed previously. Truth and candor rule today,” Karp said. |
AIRQuality II
SIOR’s ‘Core Components’ Course Provides Unique Knowledge Opportunity
AIR member Robert G. Thornburgh, CCIM, SIOR, CPM, President of Heger Industrial and 2012 President of the Los Angeles Chapter of SIOR, underlines a unique opportunity for AIR members with the announcement of the SIOR “Core Components of Commercial Brokerage” designation courses to be held March 12-15 at Caesars Palace in Las Vegas. |
| Thornburgh said the course, part of the SIOR Center for Career Advancement, includes mandatory topics such as Ethics, Construction, and Understanding the Lease Agreement. Elective topics include Advanced Sales Skills, Consolidating a Business Strategy, Negotiation Skills, and Real Estate Investment. A blue ribbon lineup of presenters from across the nation will be featured. |
“The coursework is available to both SIORs and non-SIORs. This program is a unique opportunity for anyone interested in either improving their market knowledge or pursuing the highly respected SIOR designation,” Thornburgh said. He added that for those interested in becoming an SIOR, the course will bring them one step closer to earning the designation by completing the entire education requirement over one four-day course. |
Prudential Long-Term Care UPDATE!
Member Benefit
Mary Jo Wallo, AIR’s Insurance and Investments Services consultant, reports that effective Feb. 29, Prudential is suspending new business sales for long-term care insurance in California! |
If you or any of your family members were contemplating applying for Prudential’s Long-Term Care insurance plan, the time is now, Wallo said. |
| She reports that the State of California will not approve Prudential’s filing for a new policy contract, so the current product will no longer be available after February 29, 2012. |
What this means:
- If you are interested in applying, do it now and get the current premium rates that are available.
- The cash benefit will no longer be available for contracts after February 29. This is huge, Wallo said.
- Applications need to be received in Prudential’s office no later than February 29 to guarantee you the current premium rates and policy benefits. |
What to do:
- Submit the attached LTC Questionnaire ASAP by clicking this link to receive quotes for you and any family member, spouse, or domestic partner.
- Fill out the applications and submit no later than February 24 so the processor has time to review the application. If you have questions, contact Mary Jo Wallo at 760-634-4957, or e-mail mjwallo@aol.com. |
Stuart Scott Treats Clients As He Would Want
Member Profile |
Living with yourself and your fellow brokers is a high priority for Stuart Scott, CCIM. It’s all an outgrowth of the way he insists on treating his clients. |
Stuart is a Vice President in the Ventura County office of DAUM Commercial Real Estate Services where he has served his entire 26-year brokerage career. He focuses on industrial properties primarily throughout Ventura County and along the “101 Tech Corridor” to Calabasas. |
“The main thing for me is to try and represent my clients the way I’d want to be represented. That means doing what you have to do, and doing it right. This is particularly vital in a challenging real estate market. Clients read your motives, and I believe they know I have their best interests at heart. It’s equally important to maintain positive relationships with your fellow brokers,” Stuart said. |
This genuine approach to brokerage is at the core of Stuart closing numerous transactions. For example, he recently represented Cooper Custom RV in its lease of 31,685 square feet of industrial space in Moorpark. He also represented Liska Family Trust, the owner. |
Stuart is a graduate of California Lutheran University where he earned a Bachelor of Science degree in accounting. He and his wife, Anita, reside in Newbury Park with their children, Kayla, 12, and Cameron, 8. |
In his spare time, Stuart enjoys duck hunting, ocean fishing and snow skiing. |
AIR
Member Deals
Inland Empire
•Mike and Tony Maniscalchi of Stevenson Close $12.1 Million Chino Land Sale
The industrial/commercial brokerage team of Mike Maniscalchi, SIOR, and Tony Maniscalchi, SIOR, of Stevenson Real Estate Services, report their representation of RDB Family Properties, the seller, in closing a $12.1 million land sale transaction in Chino. The 23.6-acre site had been occupied by Farmers Fertilizer Company for over 40 years. The buyer, Watson Land Company, plans to entitle and develop nearly 500,000 square feet of large scale industrial product. The property is located at 1580 Cypress Ave.
Northwest Region
•DAUM’s Sullivan Guides World Oil
DAUM Commercial Real Estate Services announces that it represented property owner World Oil Corp. in the leasing of 80,480 square feet of industrial space within the Valley Gateway Business Park in Sylmar. Corner Records Management, LLC signed a five-year lease. The space features approximately 7000 square feet of office space, 28-foot clearance and seven dock high doors. Chris Sullivan, executive vice president in DAUM’s San Fernando Valley office, represented the landlord. Ray Howden of Cushman & Wakefield represented the tenant.
Orange County
•Lee Brokers Close Orange Industrial Sale
Lee & Associates reports the closing of a 8755 square foot industrial building sale in Orange for nearly $1 million. The property is located at 702-706 W. Katella Ave. Rob Leiter of Lee-Orange represented the buyer, Jahangiri Family Trust. The seller, Hambarian Properties, was represented by Clif Fincher of the same Lee office.
South Bay
•NAI Aids Marymount College in San Pedro Acquisition
Sheri Messerlian, Senior Vice President with NAI Capital’s South Bay office, reports her representation of the buyer, Marymount College, in the purchase of a 10,500 square foot retail property located at 430 W. 6th St., in San Pedro. The seller was Kyung Hee Lee. The transaction was valued at $1.2 million. Messerlian reports that the property will serve as the Marylyn and Chuck Klaus Center for the Arts for Marymount College’s Waterfront Campus.
AIR Quick
Bursts And Coming Events
SIOR ‘Core Components Course” – March 12-15 (See AIRQuality).
AIR Forms Seminar - April 20. Courtyard Marriott Hotel, Sherman Oaks.
In-House Training - The AIR offers
training for CDX, e-MULTIPLE, WinAIR Forms, and AIRMail.
If a group of brokers or staff from your office would
like to have the AIR bring training to you in-house,
contact Martin Vartanian at (213) 687-8777. A number
of firms have already taken advantage of this great
service and been very pleased with the results.
Member Deals and Profiles - As soon as you
close a substantial deal, make sure you give Art Ansoorian
a call. Your deal will be featured in the next issue
of AIRWaves. Also be sure to get your personal bio over
to Art and be a featured member in the newsletter; it's
a great way for everyone to meet fellow members! Call
Art at (805) 653-1648, or email him at artpr@earthlink.net.
We Need Your Photos and Bios – AIR is in the process of building its database of member
photos and bios. If you would like your photo and bio
to appear on the AIR website at www.airea.com,
please send them via mail or e-mail to Jobert,
or if you have questions, call him at (213) 687-8777.
Tech
Tip
CDX - Managing Saved Searches and Saved Results
| Step 1: |
On the Home Screen in the areas labeled Search Center and Saved Sets, click View All/Manage to view all of your saved searches. |
| Step 2: |
By clicking What's New you can access the link to all of the new listings that have become available for that particular search. |
| Step 3: |
Edit or re-run your search by clicking Edit/Run. |
| Step 4: |
To delete any saved searches, check the box to the left of the search you wish to delete. Then click the Delete button in the top right corner of the screen. |
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