SWISSAIR DECISION IS STRONG SIGNAL.

Byline: GREG WILCOX Real Deals

Last week's announcement that Swissair will land in the Antelope Valley is a fitting capper for the area's commercial real estate market this year. Seems the European airline is discovering what lots of businesses already know: L.A. is indeed the place.

And things are starting to heat up in North Los Angeles County.

Sure, Swissair's decision to come to Palmdale is partly an accident of geography. The company will be doing aircraft maintenance and overhaul; space was readily available at Palmdale Airport.

Still, it sends a pretty strong signal.

``Swissair is a major international corporation and very well regarded in the airline community. This may get other people to start thinking this would be a good area for a (similar) facility,'' said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. ``The north county could see a lot of growth in development, both residential and nonresidential.''

With the cost of land about one-fifth of properties in the Santa Clarita Valley, the high desert does seem like a bargain.

There are signs that businesses looking to relocate are already leapfrogging the Santa Clarita Valley for the more favorable economic climate north on Highway 14.

This month, a portion of the $30-million, 57-acre, master-planned North Valley Industrial Center opened in Lancaster. It's one of the largest heavy industrial projects ever in the Antelope Valley and when complete will have about 1-million square feet of space and employ 1,000 people.

Developed by S&I Associates of Burbank, the complex is between Sierra Highway and Division Street, bounded on the north and south by Avenues H and I.

The new center has 44 parcels for sale, ranging in size from one acre to 30 acres, some with access to a railroad spur.

Structure sizes can be larger than 15,000 square feet.

A 16,280-square-foot building is being built on spec for Harold Gambill, a San Jose investor. A 15,000-square-foot building is going up for Good Machine & Tool, which will relocate from Palmdale. The company will occupy 8,000 square feet of its new building and lease the balance.

These companies are among the latest to commit to the Antelope Valley.

Ross Thomas, a partner at Delphi Business Properties of Van Nuys, is the marketing agent for the project.

Seems that synergy is forming between the two valleys. Thomas notes that more and more executives are buying homes in Santa Clarita Valley, which takes some of the edge off a commute to Antelope Valley.

Land prices, though, are probably the major factor.

``As the San Fernando Valley ran out of industrial space, activity began spilling over to Santa Clarita. Now owners of companies are looking at land prices in Santa Clarita and taking the next leap to the Antelope Valley,'' he said.

Land prices in the Antelope Valley are in the $2.50 to $3 per square foot range vs. $13 to to $13.50 per square foot in Santa Clarita.

Nigel Stout, an associate vice president of Grubb & Ellis L.A. North Office in Sherman Oaks, who specializes in industrial properties in the San Fernando and Santa Clarita valleys, agrees price is the major deal maker.

``They pretty much give the land away to make the deal. I could be wrong but . . . there is probably enough government incentive that you are getting the land for free,'' he said of the Antelope Valley.

In contrast, most of the land in the Santa Clarita Valley is controlled by Newhall Land and Farming, which keeps a tight rein on prices.

That keeps rents stable and is a check against overbuilding, he said.

``They try to keep land prices where they sustain growth but it's not a slaughter,'' he said of Newhall Land. ``They've done a real good job of keeping the supply of land sustainable.''

L.A.'S ECONOMIC MIGHT

Some fast facts about the Los Angeles region's economic punch:

One in every 17 consumers in the United States lives within the Los Angeles Basin market area.

It's a high-income area. More than 2.1-million households have incomes in excess of $50,000. And the average household income for the five-county area is $63,000.

This is a diverse place. The basin has more than 6.4-million Latinos, 3.5 times the national average.

Four million square feet of retail space is under construction with an additional 8 million square feet in the planning stages.

Retailers had a good 1999, with national chains looking to expand their presence in the area. Same store sales are up on an annual basis.

Source: Grubb & Ellis Co.

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Box: L.A.'S ECONOMIC MIGHT (See text)