Displaced tenants mull moving to Ventura County: several new retail projects also targeted for the area.

Major commercial structures in Ventura County escaped virtually unscathed from the 6.6-magnitude temblor, according to industry and government sources. However, those areas closest to the quake's Northridge epicenter -- most notably Simi Valley and Fillmore -- sustained considerable damage, sources reported. Meanwhile, some Ventura County commercial landlords might actually benefit from the quake because several San Fernando Valley tenants whose corporate homes were lost to the quake are expressing interest in relocating temporarily or permanently to Ventura County, sources said.

"We have had several calls from companies with operations in the San Fernando Valley looking for space in Ventura County, where there wasn't as much damage," said Tim Grant, an office broker at the Ventura office of CB Commercial Real Estate Group Inc. "People who had considered moving out of L.A., now that they have lost their buildings, now are definitely deciding to move here." Other sources confirmed that Ventura County structures survived the quake relatively well.

"So far, I haven't heard of a single problem with any of our major commercial structures," said Brian McAndrews, a retail property specialist at CB Commercial.

Added Larry Davis, assistant city manager for the City of Camarillo: "We have no reports of damage other than items falling off shelves, which is very relieving. We feel pretty lucky."

Despite riding out the quake without major mishap, Ventura County continues to have one of Southern California's softest commercial real estate markets. But it is firming at a much faster rate than those of Los Angeles County and other Southland counties, according to year-end statistics provided by local brokerage firms.

Ventura County's retail market has been particularly robust in recent months, with several major value-oriented projects in the works. Among the most closely watched and hotly contested are two competing factory outlet mall projects. Only one of those malls will eventually be built, sources said.

One proposal -- being put forth by a partnership of two Newport Beach-based developers, the Koll Co. and Ginsburg Craig Associates -- is designed for a multi-phase mall to be developed at the juncture of Rice Avenue and the Ventura (101) Freeway. The project's first phase, expected to contain about 120,000 square feet of space, would likely break ground in 1994 if it beats out the competing project, according to sources familiar with the situation.

The other factory outlet proposal, which would include a movie theater multiplex, is being targeted for a Camarillo site, according to commercial brokerage firm Grubb & Ellis Co.

But the hottest Ventura County retail submarket is a little farther south, in the Conejo Valley. That submarket's 7.8 percent year-end retail vacancy rate is the county's lowest. And that tightness is drawing interest from investors. The biggest Conejo Valley retail project being discussed by investors is a 600,000-square-foot power center for Newbury Park, to be anchored by Target. It might break ground in 1994, Grubb & Ellis reported. That would rival Oxnard's 650,000-square-foot "Shopping at the Rose" power center that was completed in 1993.

Also scheduled to break ground in the Conejo Valley in 1994 is Janss Corp.'s $25 million renovation/expansion of its 34-year-old Janss Mall in Thousand Oaks. "We have done some minor upgrades over the years, but this will be the first complete rehab," said Steve Phillips, project manager for Santa Monica-based Janss. The job, which is scheduled to begin in the second quarter of 1994 and be completed in October 1995, is to involve adding 130,000 square feet of new retail space and upgrading the existing 300,000-square-foot mall.

"It's a 30-year-old mall, one of the first in Ventura County, and it looks like it, and tenants' business shows it," Phillips said. "So they (tenants) are excited about the renovation."

Healthy retail activity in the Conejo Valley also prompted an unnamed individual investor to plunk down about $36 million to buy the North Ranch Mall in Thousand Oaks from AMB Institutional Realty Advisors of San Francisco during the fourth quarter of 1993, reported CB's McAndrews.

Unanchored retail centers (strip centers) are not faring nearly as well in Ventura County, with the year-end vacancy rate in such centers hitting 16.5 percent. That vacancy gap between anchored and unanchored retail centers will likely further increase in 1994, according to Grubb & Ellis. Continued strength in anchored centers should cause Ventura County's overall retail vacancy rate to drop from 10.2 percent at year-end 1993 to 8.9 percent by year-end 1994, Grubb & Ellis estimated.

At least two sizable vacant Conejo Valley sites are also being eyed for major retail developments in the future, sources said. One is known as the Westlake North site in Westlake Village and the other is the Seventh Day Adventist site in Newbury Park.

"Neither of these proposed projects have financing or city approvals or anything. These are long-term proposals that may become real in 1994, or it may be 1996 before something happens," McAndrews said.

Ventura County's office market, while not as healthy as its retail market, is also improving. At one time it was far more overbuilt than L.A. County's office market, but it's firming up much quicker than L.A.'s.

Ventura County ended 1993 with an office vacancy rate of 22.5 percent, still the highest in the five-county Southern California area, reported Grubb & Ellis. "But it will likely lose that dubious distinction to the South Bay in 1994," said Robert Bach, regional research director for Grubb & Ellis.

"The fourth quarter of 1993 marked the fourth straight quarterly improvement in the countrywide office vacancy rate," said Grant of CB Commercial. "We attribute that to no new construction for a couple of years now and clients realizing that this is the best opportunity for a long time to lease or purchase real estate." Particularly popular with Ventura County office tenants recently has been "flex space," space that can be used for a variety of industrial or back-office functions.

"Since 1991, Ventura County's flex space market has attracted a torrent of leasing by office tenants who build out the space for office uses," Grubb & Ellis stated in its year-end report. "These tenants are more interested in cutting costs than in corporate image. Most flex space is located in the eastern end of the county, nearer the San Fernando Valley."

Meanwhile, effective office lease rates fell by 10 to 12 percent in Ventura County during 1993, and will likely fall another 10 to 15 percent in 1994, Grubb & Ellis reported. As a result of the soft rents, commercial office buildings are selling for 50 to 80 percent of their replacement values, and larger buildings are going for just 40 percent of replacement value, Grant of CB Commercial said. These bargain prices for buildings are wreaking havoc with prices for vacant land.

"You can't even give it (commercial land) away," groused Bob Pettit, industrial property specialist at CB Commercial. "There is land available for $1.80 a foot, and some good freeway-visibility land for $3 a foot, which is more than 50 percent less than a few years ago."

Commercial space users aren't interested in buying vacant land because they can buy existing facilities for a fraction of what it would cost to build new facilities on a vacant site, Pettit said.

Some of Ventura County's largest office properties are currently for sale, and one was sold just this month, industry sources said.

The 109,000-square-foot North Coast Executive Center in Oxnard was sold by NCEC Realty Inc., a unit of Citicorp, for $5.075 million, making it the largest commercial transaction in several months, reported Grant of CB Commercial. The buyer of the building was Bedford Property Investors Inc., a real estate investment trust based in Lafayette, Calif.

Meanwhile, at least three other major Ventura County commercial properties are also being actively marketed for sale. The largest by far is Northrop Corp.'s compound in Newbury Park, which contains 608,000 square feet of commercial space in four buildings on a 100-acre site.

The compound, for which Northrop is asking $30 million, has been sitting completely vacant for the past 18 months. "There is interest in the site; that's all I can tell you," said Ed Rouse, associate vice president at Daum Commercial Real Estate Services, who is marketing the property for Northrop.

Other office properties being marketed in Ventura County are the 115,000-square-foot Chevron Building in Oxnard and the 166,530-square-foot Exxon Building on a 12.6-acre site in Thousand Oaks.

Chevron Corp. never completed its Oxnard tower, having relocated its Ventura County employees to Bakersfield and the Bay Area before the building could be completed. The never-occupied shell with minimal interior improvements has been sitting idle for about two years, and Chevron is seeking $3.5 million for it, reported Grant of CB Commercial.

Meanwhile, Exxon Co. USA continues marketing its Thousand Oaks property for $19.5 million, a reduction from its original asking price a year ago of $21 million.

"We have about 180 people working in this building, and it's too big for our current needs," said Ron Spilman, business analysis supervisor for Exxon. "But we are extremely sensitive about perceptions that we are leaving California. No decision has been made about where we would go to (if the Thousand Oaks building is sold)."