Despite predictions, no cooling seen in office market.

Last year, as a flurry of office properties came on the market, real estate folks were thinking that office properties had reached a peak and it was time to sell.

But no sooner has that spate of sales closed then another wave seems to be upon us.

Which leads me to ask, are we there yet?

Some say that rising interest rates is going to dampen the market, bringing prices down. But despite all the pundits who venture a theory about where and when the office real estate market will top out, the guessing game over how much higher prices can get--and how much lower cap rates can go--continues.

And so, apparently, does buyer demand--witness the deal just announced under which Brookfield Properties Corp. and The Blackstone Group will acquire Trizec Properties for $4.8 billion.

Closer to home, WCB Properties, a Newport Beach-based investment firm, just acquired a portfolio of five projects totaling nearly 600,000 square feet for a price estimated to be between $100 million--$110 million. The acquisition includes the 214,238-square-foot Chatsworth Business Center.

That deal is likely to be followed by several more locally.

The Johnston Group has listed its Malibu Canyon Corporate Center, a 321,000-square-foot complex at Las Virgenes and Agoura roads in Calabasas for sale. Tom Bohlinger, Kevin Shannon, Tom Dwyer and Michael Slater at CB Richard Ellis are marketing the property.

Ditto for the building THQ recently occupied at 29800 Agoura Road in Agoura Hills, and two Conejo Spectrum buildings on Rancho Conejo Boulevard in Thousand Oaks.

There is no listing price attached to the Malibu Canyon center, but chatter in the industry is that the owners are expecting something in the neighborhood of $90 million to $100 million for the complex, including property that's entitled for another office building, which would reflect yet another hike for properties in that area.

So what gives? Is there, in fact, an end in sight?

Jeff Johnston, president of The Johnston Group, said the company decided to divest Malibu Canyon because the largest shareholder in the property, Cal Johnston, has become less active in the business.

"Overall, we plan to hold most of our assets in the area," said Johnston. "We're still holding and actually looking to buy in the area, but we figured this one would be a good one to sell from my father's standpoint."

Johnston would not comment on the price his firm hoped to achieve on the sale.

Truth is, it's hard to find anyone who doesn't think real estate values will continue to escalate.

Vacancy rates are declining, absorption is brisk, and there is a widespread expectation that rents will begin rising sharply in pretty short order.

"I think it's a good time to be a seller for sure," said Eric Hasserjian, first vice president at Arden Realty. "By the same token, you're buying into a market that's appreciating. You're still having quarter after quarter of positive net absorption."

It's perhaps no coincidence that Holualoa Cos. put its Agoura Hills building on the market just after it inked a deal with THQ, which took the lion's share of the building. Or that a deal with Amgen recently closed in one of the two Conejo Spectrum buildings now on the market.

Or that WCB was attracted to the portfolio it just acquired from ProLogis. WCB officials saw in the Chatsworth center and the others it acquired, an opportunity to take advantage of what is likely to be renewed interest in Class B properties because of escalating rents in Class A properties.

"Over the last five to seven years, there's been a compression between what a tenant has had to pay for Class A versus Class B space," said Terry Thompson, WCB's vice president for acquisitions. "What we're starting to see, as a result of the trophy buildings going for the prices they've been going for, and given that the general market is supply constrained, these new buyers have no choice but to push their rents. As those rents increase, there are tenants that may not want to pay (the higher freight), but they still want something nice. So that drives our strategy."

Even more important, the market is literally awash with money, so much that there are many buyers for whom rising interest rates (and they have risen by about 200 basis points over the past year) are basically irrelevant. Case in point: The Blackstone Group, which partnered with Brookfield on the Trizec deal, just closed an investment fund with a whopping $5.25 billion. Blackstone called it the "largest real estate opportunity fund ever raised."

"I think there's still enough capital in the market so rising interest rates have not yet affected pricing," said Barbara Emmons, a broker with CB Richard Ellis, who, along with Darla Longo, brokered the ProLogis deal.

Finally, with rising interest rates, skyrocketing materials costs, and continued increases in land prices, it still costs more to build a new property than it does to buy one, even at record-breaking prices.

"There are going to be those investors who buy existing buildings because replacement costs are so much higher," said Gary Toeller, vice president for real estate development in the Los Angeles region at Opus West Corp. "As long as your buying at below replacement cost, there may be play in those investments."

Warner Center Deal

Irvine-based Real Estate Partners Inc. has acquired a 250-unit apartment complex in Woodland Hills for $50 million.

The property, The Arbors at Warner Center, includes 12 buildings on 6.7 acres.

The new owners are planning a $3 million renovation.

Sean Deasy, Spencer Scott and Scott Davies, brokers with CB Richard Ellis, represented the buyer and the seller, Gateway Arbors LLC.

Senior reporter Shelly Garcia can be reached at [phone] or by e-mail at [e-mail].