BUSINESS REALTY EXPECTED TO STAY HOT THROUGH 1999.

Byline: Gregory J. Wilcox Daily News Staff Writer

Riding a surging economy, commercial and industrial real estate markets from Glendale to the Conejo Valley should remain vibrant through 1999, according to a forecast released Thursday.

It will happen, according to Orange-based Grubb & Ellis Co., because the Los Angeles area is home to the nation's greatest concentration of businesses - 344,800 - twice the number of the second-place finisher, Cook County, Ill., which includes Chicago.

Additionally, more than 189,000 jobs were added in the area over the past 12 months, and unemployment is at its lowest level in more than two decades.

``Right now, Los Angeles County and all of Southern California is sailing. The economy is incredibly strong,'' said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

Vacancy rates for both kinds of space are falling, and rental rates are rising, the report said.

``It's a good situation if you are an owner. And if you are a tenant or a buyer it's good that (developers) are building functional buildings that are made for today's industrial companies. But the rents are going up,'' said Jim Linn, a vice president who specializes in industrial property at Grubb & Ellis' Sherman Oaks office.

Here is a snapshot of the company's findings:

In the office market, the cities of Pasadena, Glendale and Burbank hold a competitive edge over downtown Los Angeles because there is no gross receipts tax, but there is a large, well-trained labor pool and access to affordable housing.

This market has one of the lowest vacancy rates in the Los Angeles Basin, 9 percent. In Glendale, two projects are under way: One is a 24-story, 520,000-square-foot high-rise, where leases are being offered at $30 per square foot, 13 percent more than what similar space now commands. A 215,000-square-foot complex is also being built in Burbank.

In the San Fernando Valley, large blocks of commercial space have been rare for several years, and now the shortage has spread to the West Valley, Grubb & Ellis said. Land has been cleared for a 585,000-square-foot speculative project in the East Valley.

``The Conejo Valley has the opportunity for a significant amount of new construction, and some of those projects are beginning to fall in line,'' said Jim Lindvall, a Grubb & Ellis senior vice president who specializes in the commercial market.

The industrial market is especially tight, with vacancy rates down to a record low of 5.4 percent in the L.A. area.

Sales of this type of space will be curbed because there is a lack of product in many communities throughout the region, Grubb & Ellis said.

And just under 2 million square feet of space is under construction in the region. A big chunk of that is Industrial Development Services' 730,000-square-foot project at the Valencia Commerce Center.

A project about half that size, the Lewis Business Park, is being built in Van Nuys.

CAPTION(S):

5 charts

Chart: Market snapshot

(1) Glendale

(2) San Fernando Valley

(3) Conejo Valley

(4) Burbank

(5) Santa Clarita Valley