San Fernando Valleynaicapital.com/encino/dyoung/01-27-16/dyoung-market... · The Santa Clarita...
Transcript of San Fernando Valleynaicapital.com/encino/dyoung/01-27-16/dyoung-market... · The Santa Clarita...
San Fernando Valley and
Santa Clarita Valley Industrial and Office Markets
David H. Young, SIORSenior Vice President
NAI Capital 818 742 1651
23rd Annual Real Estate Market Review & Forecast
Presented to:
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Newhall
Canyon Country
Santa ClaritaValencia
Stevenson Ranch
Van Nuys
CanogaPark
Northridge
Chatsworth
Sun Valley
Pacoima
BurbankGlendale
Map not to scale
Sylmar
NorthHollywood
Panorama
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210
405
101 101
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118
170
134
ChatsworthReservoir
West Hills
Winnetka
Reseda LakeBalboa
PorterRanch
GranadaHills
NorthHills
Arleta
ValleyGlen
MissionHills
Lakeview Terrace
Hanson Dam
Shadow Hills
Sunland
Tujunga
TarzanaEncino
SepulvedaBasin
Sherman OaksStudio
City
TolucaLake
Woodland Hills
SanFernando
Calabasas
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Newhall
Canyon Country
Santa Clarita
Valencia
Stevenson Ranch
Van Nuys
Northridge
Chatsworth
Sun Valley
Pacoima
Burbank
Glendale
Sylmar
NorthHollywood
Panorama
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210
405
101 101
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ChatsworthReservoir
West HillsWinnetka
Reseda LakeBalboa
PorterRanch
GranadaHills
NorthHills
Arleta
ValleyGlen
MissionHills
Lakeview Terrace
Hanson Dam
Shadow Hills
Sunland
Tujunga
TarzanaEncino
SepulvedaBasin
Sherman Oaks StudioCity
TolucaLake
SanFernando
Woodland Hills
CanogaPark
West• Calabasas• Canoga Park• Chatsworth• Northridge• Reseda• Tarzana• Woodland Hills
Central• North Hills• Panorama City• Sepulveda• Van Nuys
East• Arleta• Burbank• Glendale• Mission Hills• North Hollywood• Pacoima• San Fernando• Sun Valley• Sunland• Sylmar• Tujunga
San Fernando Valley• Canyon Country• Newhall• Santa Clarita• Stevenson Ranch• Valencia
Santa Clarita Valley
Industrial Market Area Map
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Sub-MarketExisting Total Inventory RBA
(SF)
Under Construction
(SF)
Total Available
(SF)
Total Available
(%)
Total Vacancy
(%)
YTD Leasing Volume (SF)
Ytd Sales Volume
(SF)
Average Asking Rent $ NNN
Average Sale Price/Sf
West 28,099,210 0 1,351,421 4.8% 3.3% 1,069,865 904,220 $0.76 $237.09
Central 19,368,904 0 457,857 2.4% 1.0% 595,574 539,450 $0.75 $180.00
East 59,023,078 28,620 1,937,949 3.3% 1.7% 1,769,746 1,833,259 $0.76 $199.88
SFV Total 106,491,192 28,620 3,747,227 3.5% 2.0% 3,435,185 3,285,029 $0.76 $161.78
Santa Clarita Valley
19,782,638 0 1,265,368 6.4% 2.7% 1,144,589 521,514 $0.61 $115.97
Sub-MarketExisting Total Inventory RBA
(SF)
Under Construction
(SF)
Total Available
(SF)
Total Available
(%)
Total Vacancy
(%)
YTD Leasing Volume (SF)
YTD Sales Volume
(SF)
Average Asking Rent $ NNN
Average Sale Price/SF
SFV Total 44,959,780 122,978 6,428,235 14.3% 10.6% 3,110,219 1,838,384 $2.25 $185.81
2015 Year-end Statistics
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San Fernando Valley / Santa Clarita Valley Industrial & Office Markets
Office
Industrial
San Fernando Valley Industrial Market
Average Asking Rent and Vacancy | All Industrial Space
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• The vacancy rate for the San Fernando Valley industrial market declined to a historic low of 2.0% in the fourth quarter of 2015.
• The vacancy rate was below 3.0% for all of 2015. The last time the vacancy rate was at 2.0% was in the first quarter of 2007.
• The decline in vacancy was due to steady demand coming from users seeking to lease or buy industrial space.
• Sale and lease volumes saw a decline due to the shortage of available space. The demand to purchase industrial buildings outpaced the available supply for sale.
• Sale activity in 2015 declined 7.8% from 2014 due to the lack of available product for sale. However, compared to 2013 sales were up 80%.
• Lease activity totaled more than 3.2 million square feet in 2015- representing a 26.3% decrease from 2014 and a 47.7% decrease from 2013. The number of lease transactions took a hit due to extremely low vacancy rates.
• New construction did not kept pace with demand, a mere 500,000 square feet were delivered to market in 2015 of which approximately 90% has been leased.
• The vacancy rate for the Santa Clarita Valley industrial market declined to a record low in 2015, closing the year at 2.7% in the fourth quarter. The Santa Clarita Valley has never seen a vacancy rate below 3% until the second half of 2015.
• Tight market conditions in the San Fernando Valley industrial market had a spillover effect on the Santa Clarita Valley.
• In the Santa Clarita Valley, sale activity in 2015 more than doubled (up 157%) over 2014. The demand to purchase industrial buildings drove up sale activity.
• On the leasing side, activity totaled more than 800,000 square feet in 2015- representing a 32% decline from 2014. The number of lease transactions took a hit due to extremely low vacancy rates.
• There was no new construction delivered in the Santa Clarita Valley in 2015 and there is minimal space under construction (3 buildings totaling 398,220 square feet) to alter the current demand versus supply imbalance in the short term. There is approximately 1.7 million square feet of proposed construction.
• The 10.6% vacancy rate in the San Fernando Valley office market represents a decrease of 70 basis points in the fourth quarter 2015 over the prior year.
• The office vacancy rate dropped below 11.0% for the first time since 2008.
• Year to date lease activity totaled more than 3.1 million square feet representing a 4.4% increase over the same period last year. Average asking office rents closed 2015 at $2.25/SF, up 3.7% from 2014.
• Demand for office space was broad based coming from professional & business services, education & health services and entrainment industry.
2015 Year in Review
San Fernando Valley Industrial Market
San Fernando Valley Office Market
Santa Clarita Valley Industrial
naicapital.com
2015 Sale Transactions
Address 13207 Bradley Ave. 9401 De Soto Ave.
City Sylmar Chatsworth
Size 134,791 SF 150,263 SF
Sale Type Investor Investor
Sale Price $16 Million ($118.70/SF) $14 Million ($93.17/SF)
Cap Rate 5.6% N/A
Buyer Prologis Rexford Industrial Realty
Seller Bradley-Cobalt, LLC 9401 De Soto, LLC
Comment Core Real Estate Acquisition of NNN Leased InvestmentValue Add and Repositioning of Asset to
Create NNN Leased Investment
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2015 Lease Transactions
Address 7900 Nelson Road 7900 Nelson Road 11605-11611 Hart Street
City Van Nuys Van Nuys North Hollywood
Size 112,000 SF 91,082 SF 82,660
Min Clear Height 28 ft. 28 ft. 17-18 ft.
Term 120 months 100 months 120 months
Initial Base Rent $0.73 NNN $0.71 NNN $0.68 NNN
Operating Expenses $0.17/SF $0.17/SF $0.18/SF
Tenant PureTek Corp. PODS NBCUniversal
Landlord Rexford Industrial Realty Rexford Industrial Realty Selective Real Estate Investments
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2016 Market Forecast
Asking Rental RatesLow inventory for lease along with rising rents will continue to be the norm.
Sale PricesDemand for sale product will remain elevated due to low interest rates and probable future interest rate increases
Higher sale prices will motivate some to consider selling and then raising sales volume and pushing pricing to new heights.
ò Availability/Vacancy ratesDwindling supply, Increasing demand
ò Landlord ConcessionsLimited incentives due to strong demand and limited availability
New ConstructionRise in rents/sales to spur new construction/ redevelopment were land may be available
ò Availability/Vacancy rates The vacancy rate in the San Fernando Valley office market will continue on a downward trend.
Asking Rental Rates Average asking office rents will continue to rise in the San Fernando Valley.
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Industrial
Office