VACANCY RATE MAY START TO DROP AT R&D SITES LESSORS HOPE $2.46 MILLION LEASE FIRST OF MANY DEALS.

Byline: Gregory J. Wilcox Staff Writer

VAN NUYS - In a deal that could signal a turnaround for research and development activity in the San Fernando Valley, a manufacturer of micro devices has leased an industrial facility for $2.46 million.

Microfabrica Inc. moved from a 25,000-square-foot facility in Burbank to a 39,300-square-foot building near the Van Nuys Airport.

``We outgrew our Burbank facility and are moving into production with a variety of products, and we needed the space,'' Dan Feinberg, the company's director of sales and marketing, said Thursday.

Forty people work at the company that was formed in 1999.

Microfabrica's products are a few hundred microns in size and used by the cell-phone, military, aerospace and consumer-electronics industries.

The biggest challenge was finding the right building, Feinberg said.

``It needed to be close to Burbank so we didn't have too great of an impact on our employees. We wanted to keep everybody that we had,'' he said.

Colliers Seeley International, which represented the lessor, Arka Properties, characterized the deal as one of the largest R&D leasing transactions in the last several years. Chris Riegel of CRESA Partners represented Microfabrica.

The company signed up for 66 months, said Darren Cline, a Colliers Seeley senior senior associated who worked on the deal.

Colliers officials believe the deal has potential to position research and development in the greater Valley area, which includes eastern Ventura County and the Santa Clarita Valley, for a turnaround after several slack years.

``We hope that this represents higher absorption,'' Cline said.

While the industrial sector is extremely tight, hovering around 2 percent vacancy rate, the R&D portion of this market is softer.

Colliers officials said the Valley area has about 16.5 million square feet of R&D space. The vacancy rate for the sector inched up to 9.5 percent at the end of the second quarter from 9.3 percent at the start of the year, they said.

R&D space is characterized as having a larger office component than standard industrial space has.

This sector of the market has been soft because of a slowdown in venture capital funding.

Bruce Ackerman, president and chief executive officer of the Economic Alliance of the San Fernando Valley, said a rebound would be good news for owners of industrial buildings considered obsolete by today's standards. Warehouse companies and traditional manufacturers like newer buildings with high ceilings and big loading docks.

Now there might be a possibility to recycle older industrial buildings for research-and-development uses.

``They've kind of shifted their perspective about being particular about what they want to 'We've got to grow, and we'll find anything that works,''' Ackerman said.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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