Market Remains Hot for Office Properties

Despite escalating land prices and increased market activity in Ventura County’s commercial real estate market, analysts Thursday cautioned that a slowdown may be beneficial.

Still, experts with the CB Commercial real estate company delivered a generally upbeat message to more than 100 Ventura County business leaders who gathered at the Oxnard Hilton to review last year’s market conditions and the forecast for 1998.

The high level of market activity is indicative of the strength of the county’s economy, UC Santa Barbara economist Mark Schniepp told the crowd.

Nevertheless, developers must be careful not to offer more properties than the market can absorb, as they seek to capitalize on the hot market, said Michael Slater, who heads CB Commercial’s office sector.

The county’s office vacancy rate rose to 16.5% in the fourth quarter of 1997, compared with 13.2% in the same period the year before as developers convert single-tenant buildings to multi-tenant use, he said.

“I’m cautiously optimistic about the office market in Ventura County,” Slater said. “There has been more market activity in the last 18 months than I saw in the last five years of the 1980s. . . . Property you couldn’t give away 18 months ago is worth three times what it was.”

With no developments planned in the west county, the vacancy rate there is expected to decline, but more than 1 million square feet of office space is planned in the Conejo Valley projects ranging from Las Virgenes Road to Wendy Drive during the next three to five years, he said.

The county’s industrial sector played catch-up in 1997, after negligible growth in the previous six years, said Harry Preston, vice president of CB’s industrial sector.

“This has been the most dollar volume of industrial real estate that’s ever occurred in Ventura County,” he said.

About 1 million square feet of speculative industrial building construction is anticipated this year, Preston said.

County retail space vacancy rates are also projected to rise, with 1 million square feet of new development on the drawing boards to be built in the next few years, analysts said.