Orange County’s biggest commercial property managers combined to eke out a second consecutive annual gain amid a real estate market that remains in flux thanks to plenty of distressed properties with uncertain ownership.
Total commercial space in the county currently managed by the largest 25 property managers here grew by nearly 3 million square feet, or about 2%, in the past 12 months. The group combined for a total of 188 million square feet of office, industrial and retail space under management here, according to this week’s Business Journal list.
That matches a level last seen in 2007, at the outset of the real estate downturn.
The same companies now manage about 229 million square feet of commercial space counting properties outside the county, roughly the same amount as a year ago.
Figures have tended to see big annual changes in square footage totals in recent years—both positive and negative—although the downturn wasn’t the main reason for the swings.
Some of the industry’s largest property owners decided to take over their building management operations in the past few years. Others went the opposite route and outsourced the work.
Last year saw that trend ease and individual property sales—especially for distressed properties—lead to a moderate overall gain, according to industry executives.
“We’re still seeing lots of activity around distressed assets, although maybe not as much as we initially expected,” said Sherry Bower, managing director for the Southern California asset services division of CB Richard Ellis Group Inc., which is based in Los Angeles and has offices in Newport Beach.
CB Richard Ellis retained the No. 1 spot on this year’s list with 48.3 million square feet under management in the county, a decline of about 5% from a year earlier.
“More of these distressed assets are being turned over to investors who use third-party property managers,” said Bower, who also has been acting as a court-appointed receiver for a handful of local office properties of late.
Large local distressed office properties that have changed hands of late include the 386,000-square-foot Orange City Square office complex in Orange and Costa Mesa’s Pacific Arts Plaza, which totals 827,000 square feet.
An investment offshoot of CB Richard Ellis bought the Orange City Square property late last year. Newport Beach-based Irvine Company—No. 2 on this year’s list—picked up Pacific Arts. The deals added a good chunk of square footage to each company’s management portfolio.