Office movers see outbound shift in market focus.

Office movers see outbound shift in market focus

Industry revenues decrease as much as 20 percent in year

The companies that actually move businesses are probably as good a barometer of office relocation activity in Los Angeles County as any -- and according to them the region is undergoing a major change.

"Los Angeles County used to be designated an inbound destination and now it's considered an outgoing area, meaning more companies and people are moving out of the area than are moving in," said David Lamb, general manager of Beverly Hills Transfer & Storage in Beverly Hills.

Lamb and other movers said the change started to occur about three years ago and has been steadily accelerating ever since, with no letup in sight.

Thomas Pick, president of A Harmony Moving & Storage Co. in Inglewood, agreed. "It's definitely an outbound market. I don't have any statistics right here to prove it but it started three or four years ago. Companies are relocating out of Los Angeles and people are being transferred or moving on their own. Four major inbound markets from Los Angeles seem to be Oregon, Seattle, Wash., Atlanta, Ga., and Texas.

"People and businesses seem to be moving again to Texas because land and real estate are a lot cheaper there. You can get twice as much space in Texas as you can in Los Angeles for half the price," said Pick.

In addition to the high cost of real estate, for both office and residential use, companies seem to be moving out of the Los Angeles area because of tough environmental restrictions and the rising cost of workers compensation in California, the movers said.

But the exodus out of Los Angeles has not been heavy enough to turn the moving business into a boom industry, movers said. Some said their business has been recession-resistant during the current economic downturn but most said revenues are off from a year ago, mainly in the 10 percent to 20 percent range.

Trucking company officials said a few movers have gone out of business during the last 18 months and others have filed for Chapter 11 bankruptcy protection while continuing to operate. Other moving companies are said to be in serious financial trouble and are on the verge of going out of business.

Though moving out of Los Angeles County and California is a significant change in the commercial moving business, there is still plenty of relocating between counties, the movers said.

Some movers said that in fact, this is a very good time to be in the moving business because of the soft office rental market.

"We are one of the busier shops in town because office leasing rates right now are very attractive and there are a lot of attractive relocation incentives available to companies," said Lamb.

Those incentives offered by office building developers in Los Angeles County could include moving expenses, which typically could be between one percent to five percent of the total cost of moving into a new office, said Lamb.

He and other movers said many companies are moving to new office buildings now to lock in relatively low rental rates that eventually will go back up and preclude future moves.

The movers also said in the Los Angeles County region there has been a slight increase in relocating companies that have been forced out of business but, more frequently, moving businesses that are shrinking.

"There has been a definite increase in businesses that are moving to smaller offices because of cutbacks. Some companies are staying in the same building but just moving to another floor to smaller offices because they have fewer employees," said Tom Hezmalhalch, vice president of sales and marketing at Merit Moving Co. in Buena Park.

The movers said there isn't distinct pattern to commercial moves between counties. Companies are moving out of the major business centers of downtown Los Angeles and Century City, but an almost equal number are moving into those areas because of lease incentives, the movers said.

Other active commercial locations are the Wilshire Boulevard corridor, which stretches from downtown west to Century City, and Glendale, which has a rapidly developing downtown area, they added.

In addition, the movers said the Valencia area off Interstate 5, Thousand Oaks and Newbury Park near the 101 freeway have been active areas for commercial relocation.

An issue that could affect the cost of future relocations is a California Public Utilities Commission proposal that would set a ceiling on the price of a move. Currently, there is a minimum charge on what a mover can charge either a commercial or residential client.

Most industry executives think the proposal will take hold this coming January, along with other changes that in effect will deregulate the business, they said.

PHOTO : Relocating: Businesses head out