'Bottom fishers' get foreclosed buildings for a song; office discounts are greater than industrial discounts.

With declining land values and a glut of office space on the Los Angeles market, many local office buildings are being offered for sale at prices between 40 and 70 percent of their replacement costs, according to area real estate brokers.

"If you are a tenant whose lease is expiring, you have capital and you are seeking a long-term investment strategy, there is no use buying land if the right building exists," said Keith Green, a partner at Told Partners Inc., an L.A.-based real estate investment firm. "This is the time to bottom fish," he said, citing several "bottom-fish" deals transacted recently along the so-called Technology Corridor, which extends along the Ventura (101) Freeway from Woodland Hills to Newbury Park.

Green advised office-space users against buying raw land because finished buildings can be had for below replacement costs.

Not every section of L.A. County has such great deals, but many do, brokers concurred. Even in some of L.A. County's stronger commercial real estate markets -- such as the San Gabriel Valley and Tri-Cities (Pasadena, Glendale, Burbank) -- many good deals are available for companies looking to buy a building, brokers said.

Ronald Heim, first vice president at CB Commercial Real Estate Group's San Gabriel Valley office, said, although new construction virtually stopped two and a half years ago in the San Gabriel Valley, companies can typically pick up a building out of foreclosure for $80 a square foot that cost $100 a square foot to develop.

Heim said companies planning to construct their own office buildings will have tremendous difficulty obtaining financing unless they have a top-notch credit rating.

Kirby Greenlee, a vice president with Grubb & Ellis Co., said, although the market is tight in Burbank, Glendale and Pasadena, companies are buying buildings there for $100 a square foot that would cost between $150 and $160 a square foot to develop.

Even better deals are available in the South Bay market, where aerospace/defense companies have vacated huge amounts of office space.

Terry Reitz, senior vice president of Grubb & Ellis' South Bay office, said many South Bay buildings which cost $120 to $180 a square foot to develop can be purchased today for $50 to $90 a square foot.

The industrial market, he pointed out, isn't as depressed. Reitz said companies today can buy land and build an industrial building in the South Bay for $45 to $48 a square foot, which is only about $10 a square foot less than buying a pre-existing industrial building there would cost.

Reitz said he hasn't seen too many sales this year, but added that he expects to see "a lot more examples" of companies buying existing buildings for their own use in 1993.

"More building are being taken back by their lender, thus, prices should drop a lot further," he said.

"The following are examples of recent deals in which companies bought buildings for their own use:

* Amgen Inc., a manufacturer of therapeutic and diagnostic equipment, bought two buildings in third quarter 1992 totaling 112,000 square feet of space at the Westlake Spectrum in Westlake Village for $32 a square foot, not including tenant improvement costs, such as partition walls, ceilings, lighting, flooring or doors, said Green. The buildings were built on "spec," meaning they were built without a precommitment from a major tenant, three years ago.

But the buildings were never occupied, Green said. He said the developer defaulted; the lender, Security Pacific National Bank, foreclosed on the two buildings; and Amgen bought the foreclosed, or real-estate owned, properties from the bank.

Green said the developer probably spent about $64 to $68 a square foot to develop the properties. Today, because of decreasing land values, he said, it would cost about $55 a square foot to develop the building.

* Another company, which Green refused to name, is in escrow to buy the 66,000-square-foot Village Corporate Center in Agoura for 50 percent of its replacement value, Green said. The deal is expected to close in March, he added. The property was foreclosed on and is owned now by a life insurance company.

He said 60 percent of the building is occupied and the owner is only going to use 15,000 square feet of space. Green said 65,000 square feet of vacant land next to the building is also part of the deal. Green said the replacement value for the building, along with the vacant land, would cost $70 to $80 a square foot. When the building was built in 1984, he said, it probably cost about $100 a square foot to develop.

* Vinyl Technologies bought a 65,000-square-foot manufacturing building in Monrovia last April for $27 a square foot, almost half of what it would cost to build a similar building today, said Robin Dodson, a broker in the San Gabriel Valley office of Grubb & Ellis. She said Vinyl Technologies only had a budget for a $40,000-square-foot building. But the low cost enabled it to buy a much larger building.