Printer Friendly

SLUGGISH ECONOMY AND DEFENSE DOWNSIZING SLOW SOUTH BAY OFFICE MARKET IN FIRST QUARTER

 TORRANCE, Calif., April 28 /PRNewswire/ -- A sluggish economy combined with the continued restructuring of the defense industry slowed the South Bay office market in the first quarter, according to a report released by Grubb & Ellis Commercial Real Estate Services.
 The vacancy rate in the South Bay climbed to 22.5 percent in the first quarter, up from 20.7 percent a year ago.
 "The increase in vacancy is due to space becoming available in existing buildings," said Jim Biondi, senior vice president with Grubb & Ellis' South Bay office. "With the continued weak economy, space continues to come on the market as companies downsize, leave the area, or close their doors altogether."
 Net absorption for the first quarter totaled -186,520 square feet, vs. 203,427 square feet of positive absorption for the same time period a year ago. Absorption measures the net change in office occupancy for a given time period.
 Although absorption was negative overall, there was still activity in the market with companies occupying new space in the first quarter. Significant transactions included:
 -- Pacific Refining Co. occupied 16,086 square feet in Crocker Plaza in Long Beach;
 -- Retirement Housing Foundation occupied 15,501 square feet in Park Tower in Long Beach;
 -- Carnet Holding Corp. occupied 18,197 square feet in South Bay Technology Center in Torrance; and
 -- State Farm Insurance occupied 15,100 square feet in Continental Park Terrace in El Segundo.
 The majority of the South Bay's negative absorption occurred in the LAX/Century Boulevard submarket, which reported 127,317 square feet of negative absorption and a vacancy rate of 38.8 percent.
 "The majority of the negative absorption in this submarket was in a single building, which had 90,000 square feet of space available for sublease," said Biondi. "The sublease expired and it became direct lease space, which is recorded as negative absorption in our statistics."
 Moving south, El Segundo/Manhattan Beach reported 66,986 square feet of negative absorption and a vacancy rate of 14.9 percent.
 "This submarket has a large number of aerospace and defense firms, which are continuing to downsize their operations," said Biondi.
 Torrance Freeway also recorded negative absorption in the first quarter of 18,024 square feet and a vacancy rate of 26.1 percent. By comparison, Torrance Central had 21,246 square feet of positive absorption and a vacancy rate of 19.2 percent.
 Both Long Beach Suburban and Long Beach Downtown recorded some growth in occupied office space in the first quarter. Long Beach Suburban had 1,434 square feet of positive absorption and a vacancy rate of 20.6 percent. Long Beach Downtown had 4,169 square feet of positive absorption and a vacancy rate of 27.3 percent.
 "Long Beach held its own this quarter," said Biondi. "There was some growth, however, the majority of the activity came from tenants moving within the market and taking the same amount of space at their new location as they had left behind."
 There were no new office buildings under construction in the South Bay in the first quarter, just as there were none under construction a year ago.
 -0- 4/28/93
 /CONTACT: Sharon Abar, Public Relations director of Grubb & Ellis, 714-937-0881/


CO: Grubb & Ellis ST: California IN: SU:

JB-JN -- LA028 -- 2089 04/28/93 13:29 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 28, 1993
Words:551
Previous Article:ACTIVITY UP SHARPLY IN SOUTH BAY INDUSTRIAL MARKET, REPORT REVEALS
Next Article:OCCIDENTAL 'SIGNIFICANTLY STRENGTHENED' BY RESTRUCTURING, CHAIRMAN SAYS


Related Articles
DEMAND FOR ORANGE COUNTY INDUSTRIAL SPACE SLOWS IN FIRST QUARTER, REPORT REVEALS
DEMAND FOR SOUTH BAY INDUSTRIAL SPACE UP IN FIRST QUARTER OF 1992, REPORT REVEALS
SOUTH BAY OFFICE MARKET HAS BEST QUARTER IN TWO YEARS, FIRST-QUARTER REPORT REVEALS
SOUTH BAY OFFICE MARKET HAS SLOW THIRD QUARTER, REPORT REVEALS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters