Berkeley’s Rosen: Area a Bright Spot, Office Still Weak
Gutherie Sells Six of Eight New Buildings, Weighs Buying More Land; Moe Joins Market Profiles
REAL ESTATE
by Daniel D. Williams
COMMERCIAL
“With commercial mortgage rates in the 5.5% to 6% range, borrow every cent that you can,” said Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at the Haas School of Business at the University of California, Berkeley
“Mortgage rates are at historic lows, despite the moderate increase in rates over the past few weeks,” Rosen told some 300 Orange County real estate folks at a ritzy get-together recently at the Four Seasons Hotel Newport Beach.
The occasion: The Southern California Economic Summit put on by Newport Beach-based Buchanan Street Partners and other sponsors.
For the most part, Rosen was upbeat about Orange County and all of Southern California, calling it one of the strongest markets nationwide.
He estimated jobs growth of 1.5% to 3% in the next 12 months.
“The Southern California economy is one of the brightest in the entire country, and is the only one where we project at least a 1.5% increase in jobs,” Rosen said.
Increased defense spending should be a boost as Southern California receives 15 cents on every defense dollar.
In real estate, apartments and industrial markets continue to show strength, Rosen said.
“The industrial markets have not overbuilt here, because it is fairly easy to pull back on tilt-up construction projects when the market slows,” he said.
The office sector remains a problem, Rosen said.
Office will need to absorb a “two to three year supply” before occupancy stabilizes, he said.
Expect to see more Wall Street money moving to real estate, particularly pension fund and endowment money, Rosen said.
Sectors in recovery include consumer spending, housing, home mortgages, defense spending and health care, said Rosen, who directs $2 billion in securities research for Berkeley-based Lend Lease Rosen Securities LLC.
Guthrie Weighing Land Buy
Rob Guthrie, president of Laguna Hills-based Guthrie Development Co., said he’s emboldened by the company’s Arroyo Vista Business Center industrial development in Rancho Santa Margarita.
“We’ve already sold six of the eight buildings in Arroyo Vista Business Center and expect the other two to sell shortly,” Guthrie said. “We’re seeing enough demand in South County to convince us that we need to acquire some new land for other projects.”
Arroyo is a specialized development that reflects what’s selling these days: smaller industrial buildings. The development counts eight buildings totaling 58,000 square feet of space on 3.6 acres at the corner of Arroyo Vista and Valeroso.
The remaining two buildings at Arroyo are a 12,028-square-foot one at 23122 Arroyo Vista and a 6,668-square-foot facility at 23132 Arroyo Vista.
Guthrie bought the site from a private investor for $2 million in 2001. Development topped $3.6 million.
BranDit Systems Inc., a Foothill Ranch maker of barcode products, bought a 6,600-square-foot building at Arroyo and was the first to set up shop there.
Among the other buyers and tenants:
& #149; KAS Group Inc., which bought a 10,005-square-foot building for $1.26 million.
& #149; Prieto Construction, which bought a 5,932-square-foot building for $750,400.
& #149; CEM Engineering, which signed a six-year lease for a 5,670-square-foot building. The lease contains an option to buy at a preset price.
& #149; Individual investor Bill Zolg bought a 6,521-square-foot facility for $860,000.
& #149; Investors Ali Sar and Ali Sar Jr. bought a 4,576-square-foot building for $574,814.
RESIDENTIAL
When real estate veteran Donald Moe stepped away from The Irvine Company, people were watching to see where he’d end up. Now we know.
Moe has signed on as vice chairman and principal of Costa Mesa-based research and consulting firm Market Profiles.
At Market Profiles, Moe is set to work with community planners and developers and homebuilders getting into community development.
For 30 years, Moe has been active in OC real estate, playing a major role in the marketing of the Irvine Ranch and Rancho Mission Viejo. With Market Profiles, Moe is set to oversee a new masterplanned community research, merchandising and marketing division.
Most recently, Moe served as senior vice president, residential sales and marketing for Irvine Community Development Company, the community planning and development arm of the Irvine Co.
In that role, Moe did research and marketing for Crystal Cove, the Newport Coast, Shady Canyon, Northpark, Northpark Square, Quail Hill and Turtle Ridge.
From 1984 to 1995, Moe served as senior vice president of marketing and corporate affairs for the Santa Margarita Company, where he led strategic planning on the communities of Rancho Santa Margarita and Las Flores and began early stage planning on Ladera Ranch.
Before that, Moe had a stint from 1972 to 1984 at the Irvine Co. in industrial and later retail management positions.
