Orange County became the tightest office market in the U.S. in the second quarter, according to a study of vacancies nationwide by CB Richard Ellis Group Inc.
The county’s office vacancy rate of 7.9% is the lowest nationwide among metropolitan and suburban markets. OC is excluded from downtown rankings,I hope Irvine and Anaheim don’t take it personally.
The other top markets in both metropolitan and suburban rankings,including Ventura County, Nashville and Honolulu,all have vacancies around 9%.
In the first quarter, OC ranked third with a vacancy of 9.3%.
“Orange County is a great place to live and work and we have a diversified economy,” said Steve Case, senior vice president, leasing, for The Irvine Company’s office properties unit. “We’ve experienced net job growth, which has led to strong leasing.”
Things are looking up nationwide, according to CB.
“Downtown and suburban markets posted their fifth straight quarter of positive absorption with a combined increase of 8.3 million square feet over last quarter,” CB said on a Web report. “Los Angeles, Washington, D.C., and Boston led the way with over 5.1 million square feet of combined absorption.”
In another report, OC is ranked the No. 3 office market in the country for investors to place their money, according to Marcus & Millichap Real Estate Investment Brokerage Co. That’s up one slot from last year.
The brokerage also cited declining office vacancy as a key factor. And it points to job growth,an expected 13,000 office jobs this year,as well as little new construction in 2005.
“Orange County’s office market is expected to build upon the momentum started last year, with tightening market conditions and growing revenue streams forecast for 2005,” Marcus’ report stated.
The median price of office space in the John Wayne Airport area jumped 25% versus a year earlier to $195 per square foot, according to Marcus.
Some high-profile deals drove up the median, including the sale of the Washington Mutual campus in Irvine for $360 per square foot.
Small Fixation
Voit Development Co. really likes things small.
It’s bought a couple of office buildings in Aliso Viejo totaling 74,000 square feet and plans to dice them up as office condos at 800 to 4,400 square feet each.
Last month I wrote about a similar project of Voit’s in Costa Mesa. There the company bought a 47,000-square-foot building with plans to do condos ranging from 1,000 to 4,000 square feet.
The Aliso Viejo project, dubbed Liberty Plaza, is at 6A and 6B Liberty St. The developer, a unit of Woodland Hills-based Voit Cos., plans 30 condos.
“With the growing demand for office space in Orange County, Voit plans to remodel the buildings to fit the increasing numbers of small owner users in the South County marketplace,” said James Camp, senior vice president of development and acquisitions with Voit, in a statement.
Liberty Plaza is occupied by Refco, Cummulative Capital and the Catholic Church.
Chris Cussen will be the project manager for Liberty Plaza. After being carved up, it should be ready early next year.
Chris Deason and Dave Alderman of Voit Commercial Brokerage LP’s Irvine office represented sister company Voit Development in the acquisition of Liberty Plaza, as well as the seller, Liberty Office Partners LP. The duo is set to market the condos for sale.
California’s Supreme Court last month denied Anaheim’s appeal of a $20 million verdict against the city.
Anaheim now must pay 22 homeowners and 396 Investment Co., an affiliate of Newport Beach’s Fieldstone Corp., according to Newport Beach-based Newmeyer & Dillion LLP, which represented the homeowners and builder.
The homeowners argued the 60 million-gallon Olive Hills reservoir leaked and caused damage to nearby homes in Orange. Anaheim owns and operates the reservoir.
Initially, homeowners sued the builder of Vista Royale home development, as well as both Anaheim and Orange.
While the case was being tried, the developer and its insurers assisted homeowners by making home payments, guaranteeing mortgages and renegotiating payoffs, according to Newmeyer. The builder also stabilized a key slope of ground.
The builder later joined suit against Anaheim to recover its costs.
Anaheim lost a two-phase jury trial, the first ending in 2001 and the second in 2002.
Doggy Land
South County has its first dog park in a masterplanned community, according to Rancho Mission Viejo LLC, developer of Ladera Ranch near Mission Viejo.
The 155-acre park, known as “Wagsdale Park,” is open only to Ladera residents.
“We saw a real need for this kind of park within Ladera Ranch, where so much of the lifestyle revolves around outdoor activities and families who have pets,” said Anne Marie Moiso, director of marketing for Rancho Mission Viejo, based near San Juan Capistrano.
