VACANCIES SLAMMING GLENDALE EMPTY OFFICES AFFECTING RETAIL TAX INCOME.Byline: Naush Boghossian Staff Writer GLENDALE - While commercial real estate markets in Burbank and Pasadena are holding their own, Glendale's is struggling in the wake of a nearly two-year string of corporate departures and downsizings. Nearly 15 percent of the city's more than 6 million square feet of office space was vacant in the first quarter of 2005 - up from 13 percent in the fourth quarter of last year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. commercial real estate firm Grubb & Ellis Co. That's significantly higher than Burbank's 11.1 percent and Pasadena's 6.1 percent, according to the data. And for Glendale, the stakes are high: Vacant offices mean fewer shoppers and consumers, hitting the city's income from its retail sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. . ``Historically, a Glendale vacancy of 12 percent (or more) was not cause for alarm, but today that ... is a concern because there aren't any tenants currently pursuing that vacancy, and those that are are also looking at other markets,'' said William R. Boyd Jr., executive vice president and managing director of Grubb & Ellis. But city officials, committed to an aggressive redevelopment effort, note factors affecting the market including a generally weak market nationwide, as well as the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the commercial real estate market. ``Invariably in·var·i·a·ble adj. Not changing or subject to change; constant. in·var  i·a·bil , somebody's high and somebody's down and it
can result from a single or couple of instances where leases are
up,'' City Manager Jim Starbird said. ``I haven't seen
anything to indicate a long-term trend. My experience has been these are
taken care of with market forces. We will lease up the
space.''
In the 1980s, Glendale's vacancy rate was in the single digits, but for the past few years it has hovered in the 10 percent to 14 percent range. Recent hits began about two years ago when the state shut down Fremont Compensation Insurance Co., leaving 150,000 square feet vacant. Last year, longtime long·time adj. Having existed or persisted for a long time: a longtime friend; a longtime resident of Detroit. longtime Adjective tenants Willis North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Howard Building Corp. moved to downtown Los Angeles Downtown Los Angeles is the central business district of Los Angeles, California, located close to the geographic center of the metropolitan area. The sprawling, multi-centered megacity is such that its downtown core is often considered just another district like Hollywood or - the first time that's happened since Glendale built its office buildings. Baxter Healthcare Corp. also last year vacated 75,000 square feet at 550 N. Brand Blvd. So far this year, Nestle has vacated 150,000 square feet at its North Brand building; Disney Stores, with 150,000 square feet on North Brand, announced it's leaving at the end of the year. ``Glendale has not experienced this degree of tenant exodus since the market began expanding in 1979 with the completion of the city's first office buildings,'' said Boyd. ``Because of the convergence of all these various factors, it's created a perfect storm situation in Glendale.'' Meanwhile, Glendale's neighbors are not getting hit as hard. Burbank has bounced back from a 2003 vacancy rate of 15.8 percent, with several office projects under construction, said Jack Lynch, senior project manager for the city of Burbank. Burbank also has landed two major tenants in the past year: WMC WMC Winter Music Conference WMC Weill Medical College (Cornell University) WMC Wisconsin Manufacturers and Commerce (Madison, WI) WMC Westchester Medical Center WMC Western Mining Corporation Mortgage Co. signed on for 195,000 square feet and Yahoo Overture overture, instrumental musical composition written as an introduction to an opera, ballet, oratorio, musical, or play. The earliest Italian opera overtures were simply pieces of orchestral music and were called sinfonie. agreed to lease 300,000 square feet. And the city is gearing up a marketing program designed to lure lure the skin-covered object which runs on a monorail on a Greyhound racing track and which the dogs are schooled to chase. The lure must be kept 30 to 40 ft ahead of the leading dog so that the field is stretched out. more business. Entertainment-based businesses increasingly are finding the city's low- level, campus-style buildings appealing, said Gerald Porter, vice chairman of Cresa Partners, a global tenant representation company that has been involved in finding space in Glendale and Burbank for entertainment industry tenants. ``It's not, 'What did Glendale do wrong?' It's just (that) demand goes in cycles,'' Porter said. ``It can turn fairly quickly, but it would require, for the entertainment demand, that Burbank exhaust its supply before you see strong spillover spill·o·ver n. 1. The act or an instance of spilling over. 2. An amount or quantity spilled over. 3. A side effect arising from or as if from an unpredicted source: demand in that sector.'' Glendale also is facing growing pressure from downtown Los Angeles, which is renewing efforts to woo tenants, as well as Pasadena, which over the past seven years has boosted amenities, including restaurants and hotels. Naush Boghossian, (818) 546-3306 naush.boghossian(at)dailynews.com CAPTION(S): 2 charts Chart: (1 -- 2) THE OFFICE MARKET SOURCE: Grubb & Ellis Daily News |
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