Southern California Office Real Estate Blog

LOS ANGELES OFFICE RENTS CONTINUE TO RISE

LOS ANGELES OFFICE RENTS CONTINUE TO RISE

 Office building rents in the Los Angeles area will continue to rise over the coming years as businesses expand, according to a survey of California real estate professionals in the office space and investment market.
“This will cause the availability of office space to shrink,” the survey results noted. “Results reveal a strong belief that rental rates for office space in Los Angeles will continue to increase and may even rise at faster rates than the brisk 4.7 percent average in 2006.”
This increased demand in the face of limited new supply is also seen to be driving down vacancy rates over the four year horizon of the forecast, said the statement.
“This survey revealed that Los Angeles real estate survey participants look for a tightening of the office space market over the next three years,” said economist Jerry Nickelsburg at the Anderson Forecast of the University of California in Los Angeles (UCLA).
The survey was conducted in conjunction with the law firm of Allen Matkins Leck Gamble Mallory & Natsis LLP.

Info courtesy of Xinhua General News Service

Building Owners and Managers Association International Pushes Members to To Go Green

Building Owners and Managers Association International Pushes Members to To Go Green
The Building Owners and Managers Association International has challenged its members and the real estate industry to improve energy efficiency.. The plan includes a Seven-Point Challenge for members to reduce the use of natural resources, non-renewable energy sources, waste production and work in coordination with building management, ownership, and tenants to achieve the following goals:
·  Continue to work towards a goal to decrease energy consumption by 30% across portfolios by 2012;
·  Benchmark energy performance and water usage through EPA’s Energy Star benchmarking tool;
·  Provide education to building managers, building owners and operators, engineers, and others involved in building operations, to ensure that equipment is properly maintained and utilized;
·  Perform an energy audit and/or retro-commissioning of buildings and implement low-risk, low-cost strategies to improve energy efficiency with high returns;
·  Extend equipment life by improving the operations and maintenance of building systems and ensure equipment is operating as designed;
·  Through leadership, positively impact your community and your planet by helping to reduce your industry’s role in global warming; and
·  Position yourself and the industry as leaders and solution providers to owners and tenants seeking environmental and operational excellence.
 “The challenge before us is ambitious but achievable,” stated Kurt Padavano, BOMA International chairman and CEO. “Current research estimates that energy consumption in commercial buildings accounts for 18% of US greenhouse gas emissions. Responsible building operating and management practices can significantly reduce energy consumption, lower GHG emissions, and thus diminish a building’s carbon footprint.”
BOMA International’s Market Transformation Energy Plan states that through implementation of no- and low-cost operation and management practices alone, buildings may see a reduction in energy consumption of up to 30%. In addition to lowering operating costs and enhancing asset value, these measures will improve tenant comfort and satisfaction with better building temperature control and lower absenteeism and increase tenants’ productivity, resulting in real cost savings for tenants.
BOMA believes that increasingly the market will demand energy efficient sustainable buildings and that the Seven-Point Challenge supports the industry in making the business case for implementing sustainable practices, thereby bringing value to owners and operators.
By working with real estate professionals through the BOMA network of 91 local associations, with all levels of government, and the countless number of public and private groups with similar goals, BOMA International believes market transformation will be realized.
BOMA International chairman-elect Brenna Walraven, executive managing director of national property management for USAA Real Estate Co., added, “Commercial real estate owners and operators understand the triple bottom line value to reducing energy consumption and implementing “high performance and sustainable management practices; these efforts not only have dramatic environmental benefits, but also have tremendous financial benefits.” She further added that there would be incentives for companies who follow the Seven-Point Challenge.
Info courtesy of Natalie Dolce
Copyright © 2007 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part
 

TECHNOLOGY AND THE DEMAND FOR COMMERCIAL REAL ESTATE

Research Brief - TECHNOLOGY AND THE DEMAND FOR COMMERCIAL REAL ESTATE
 

• Technology will be an increasingly important influence on the demand for commercial real estate, especially as tenant demands for different types of building technology evolve.
 

• Technology, as it drives overall growth in the economy, will have a generally positive impact on commercial real estate demand.
 

• The demand for intelligent building attributes will vary both by property type and geographic market.
 

THE STUDY
This study examines how technology affects the demand for commercial real estate in three primary ways: 1) on overall tenant demand by property type; 2) on tenant demand for particular buildings; and 3) on demand for properties by investors. The analysis in this study is based on
interviews and a review of articles, reports and databases addressing technology change and real estate demand.
 

FINDINGS
There are many attributes of an intelligent building. Depending on the intended use of any particular building, these characteristics will vary in importance. The most important attribute, in general across all property types, is the voice and data communications network. Other important
building attributes include energy efficiency, lighting and security.
 

Among the key conclusions of the report are:
 

• Relatively few industrial owners are interested in intelligent building technology and are instead focused on other characteristics that appeal to the widest possible range of tenants.
 

• The demand for intelligent building technologies for office tenants is in its infancy. Other factors such as overall costs and proximity to employees and customers still dominate.
 

• The most important technology attribute for multifamily is highspeed Internet access, while most other technologies are viewed as less important.
 

• Telecommunications and adaptability of space are key features for retail tenants although technologies that improve energy efficiency, security, and lighting can reduce owners’ expenses.
 

• The demand for many technologies is relatively undeveloped for hotel properties although it is generally not too costly to wire hotel rooms for high-speed Internet access.
 

The demand for intelligent building attributes as well as the overall influence of technology on commercial real estate demand will vary by geographic market.
 

Info courtesy of Scott R. Muldavin, The Muldavin Company, Inc.
 

*The complete report is available at www.realtor.org/research.nsf/pages/NatlcenterforRE
 

Charlotte, N.C. Leads Lowest Office Vacancy Rate

Charlotte Leads Lowest Office Vacancy Rate
The Charlotte, N.C. downtown district recorded the lowest Q2 2007 office vacancy rate in the country, according to numbers compiled by CB Richard Ellis Group. The 3.08% vacancy rate was also the country’s lowest rate for the second consecutive quarter. Charlotte, which posted a 3.14 % rate in Q1 2007, finished ahead of Manhattan, which had a 4.8% vacancy rate.
-LoopNews - July 19, 2007
 

10 Best Places for Starting a Small Business

10 Best Places for Starting a Small Business
 

Florida is the best state to grow a small business, according to a new study by Bizjournals, the Web site of American City Business Journals Inc.
Bizjournals used a 12-part formula to rate the vitality of small-businesses in the nation’s 75 largest metropolitan areas. These 75 markets, taken as a group, had 179 million residents as of mid-2005, accounting for 60 percent of the nation’s total population. They also included 4.5 million small businesses, a number that rose by 7 percent between 2000 and 2005.
 

The study’s objective was to identify those metro areas that are most conducive to the creation and development of small businesses. The highest scores went to areas that have prosperous economies, are expanding rapidly, and are densely packed with small businesses.
The top 10 are:
 

Orlando
Sarasota-Bradenton, Fla.
Miami-Fort Lauderdale, Fla.
Las Vegas
Jacksonville, Fla.
Raleigh, N.C.
Washington, D.C.
Salt Lake City, Utah
Oxnard-Thousand Oaks, Calif.
Minneapolis-St. Paul
 

For a more complete results, see how all 75 markets ranked for small business growth.
 

Source: BizJournals, G. Scott Thomas (07/10/07)  
 

Fortune 1000 Companies Headquartered in Southern California

Fortune 1000 Companies Headquartered in Southern California
(Ranking published April 30, 2007)
Fortune                                                          Revenues
Rank                       Company Name                (million $)                            __ Location
64                           Walt Disney                     34,285.0                                Burbank
70                           Ingram Micro                    31,357.5                                Santa Ana
73                           Northrop Grumman           30,304.0                               Los Angeles
91                           Countrywide Financial        24,444.6                                Calabasas
124                         Occidental Petroleum         19,029.0                                Los Angeles
160                         DIRECTV Group                14,755.5                               El Segundo
163                         Computer Sciences            14,623.6                               El Segundo
171                         Amgen                             14,268.0                               Thousand Oaks
189                         Health Net                        12,908.4                               Woodland Hills
192                         Edison International          12,622.0                                Rosemead
228                         KB Home 1                      11,003.8                                 Los Angeles
289                         First American Corp.           8,499.1                                 Santa Ana
296                         Hilton Hotels                      8,162.0                                 Beverly Hills
322                         Jacobs Engineering Grp       7,421.3                                  Pasadena
367                         Dole Food                          6,219.3                                 Westlake Village
402                         Reliance Steel & Aluminum   5,748.4                                  Los Angeles
406                         Mattel                                5,650.2                                  El Segundo
412                         Avery Dennison                  5,583.1                                  Pasadena
437                         Pacific Life                          5,201.9                                  Newport Beach
458                         DaVita                               4,880.7                                  El Segundo
467                         Ryland Group                     4,757.2                                  Calabasas
498                         Western Digital                   4,341.3                                  Lake Forest
520                         CB Richard Ellis Group         4,032.0                                  El Segundo
529                         Gateway                            3,980.8                                  Irvine
533                         Standard Pacific                  3,964.0                                  Irvine
557                         Live Nation                      3,691.6                                 Beverly Hills
560                         Broadcom                         3,667.8                                   Irvine
574                         Stater Bros. Holdings         3,508.8                                  Colton
622                         Mercury General                 3,168.7                                  Los Angeles
644                         Allergan                            3,063.3                                  Irvine
657                         Unified Western Grocers     2,953.8                                  Commerce
722                         Indymac Bancorp               2,591.0                                  Pasadena
735                         Beckman Coulter                2,528.5                                  Fullerton
736                         Fleetwood Enterprises         2,526.0                                 Riverside
777                         Quiksilver                           2,362.3                                 Huntington Beach
812                         Univision Communications    2,166.7                                 Los Angeles
851                         Guitar Center                      2,030.0                                 Westlake Village
858                         Molina Healthcare                 2,005.0                                 Long Beach
865                         Watson Pharmaceuticals       1,979.2                                  Corona
990                         Viewsonic                         1,589.1                                  Walnut
 

San Diego County:
Fortune                                                                  Revenues
Rank                       Company Name                  (million $)                             Location
210                         Sempra Energy                 11,850.0                               San Diego
298                         Science Applications Int’l     8,127.0                                San Diego
317                         Qualcomm                         7,526.0                                San Diego
685                         Jack in the Box                  2,765.6                                San Diego
Note: DIRECTV Group is a subsidiary of News Corporation’s Fox Entertainment Group
Note: Companies new to the top 1000 list are in bold typeface
Source: Fortune Magazine, April 30, 2007
 

San Diego Office Tower Sells for $200M

San Diego Office Tower Sells for $200M 

Wereldhave USA has purchased Advanced Equities Plaza (pictured), a 23-story, 380,000-square-foot office tower located in downtown San Diego. 

Wereldhave USA is the U.S. unit of Wereldhave NV, an international real estate company based in The Netherlands. The company expanded into the U.S. in 1979, and this is its first acquisition on the West Coast. 

Michael Kane, Kraig Kristofferson, Bob Smith, Karen Scholte, Sara Rollins and Stacy Meronoff of the Newport Beach and San Diego offices of CB Richard Ellis Inc. represented the buyer in the transaction. 

A seller was not named in the transaction, but several market sources report 

that the seller was Lankford and Associates Inc. 

Advanced Equities Tower, which opened in 2005, was the first office 

high-rise to come to downtown San Diego since 1991, said Kristofferson, a 

senior vice president with CB Richard Ellis. The other is DiamondView Tower, 

developed by Cisterra Partners L.L.C., which opened this year and is now 80 

percent leased. 

The acquisition is important to Wereldhave USA, Kristofferson said. “They 

want to expand their presence on the West Coast,” he said. He said that 

while European investment in San Diego office properties has been rare, the Euro’s strength in relation to the dollar could mean there is more 

to come. 

“This [transaction] shows the continuing strength of the Southern California 

investment market,” he said. “The market is continuing to see record prices.” 

According to a statement by Wereldhave, only 12 percent of the leases on the property will expire before 2015, and the company said it plans to lease the remaining space in the building before the end of the year. 

The San Diego office market improved in the first quarter of this year, posting net absorption of approximately 100,000 square feet, compared to negative 32,000 square feet during last year’s fourth quarter, according to a report on the office market from CB Richard Ellis. New construction completions totaled approximately 300,000 square feet, with net absorption from those properties equaling nearly 150,000 square feet. Existing buildings totaled approximately 50,000 square feet of negative absorption. 

Vacancy rose by 0.9 percent, to 11.5 percent, and average asking lease rates increased 1.5 percent in the quarter, to $2.32. Lease rates in the market, though, have been growing at a much faster pace over the last three years, increasing 22.7 percent. 

info courtesty of By Eugene Gilligan - http://www.multi-housingnews.com 

Top 10 Worldwide Real Estate Developments

Top 10 Worldwide Real Estate Developments

Upscale travel magazine Travel and Leisure picks these 10 developments as the world’s best for people seeking the ultimate home away from home.

1. Castello Di Casole — Tuscany, Italy. Includes 19 restored farmhouses. Price from $585,000 for a fractional and from $6 million for full ownership.

2. The Club At Spanish Peaks — Big Sky, Montana. Boasts ski-in, ski-out access during winter, and rights to a Tom Weiskopf-designed 18-hole golf course in the spring. Price of cabins from $2.2 million; sites from $700,000.

3. Fairmont Heritage Place — San Francisco. Condos are the newest addition to San Francisco’s Ghirardelli Square. Most units overlook the bay. Shares from $250,000.

4. Four Seasons Residence Club — Vail, Colo. Includes 19 ski cabins, each divided into 12 shares. Price from $390,000.

5. Green Village at Cap Cana — Punta Cana, Dominican Republic. Has 245 full-ownership, one-bedroom bungalows and two-bedroom villas have private infinity pools, stone patios, and outdoor hot tubs. Price from $465,000 for bungalows; from $867,000 for villas.

6. Miraval Living — New York City. Zen living. On higher floors there are 365 one-, two-, and three-bedroom full-ownership condo units. Price from $650,000.

7. Palazzo Tornabuoni — Florence, Italy. Steps from the Piazza del Duomo, this renovated 15th-century palace has 36 units, from studios to three-bedroom apartments, each divided into eight fractional shares. Price from $227,000.

8. The Palmyra Resort & Spa — Montego Bay, Jamaica. Includes 656 full-ownership units, ranging from one-bedroom condos to three-bedroom beach-front villas. Price from $450,000.

9. Ritz-Carlton Club And Residences — Kapalua Bay, Maui. The 84 full-ownership and 62 two-, three-, and four-bedroom fractionally owned condos at this ocean-front resort have views of Molokai’s and Lanai’s volcanoes. An additional 107 full-ownership suites are available at the nearby Ritz-Carlton Hotel. Price from $300,000 for the Club; from $895,000 for suites.

10. W South Beach Hotel & Residences — Miami Beach, Fla. Has 419 Yabu Pushelberg-designed, full-ownership condo units with up to three bedrooms, plus five 1,332-square-foot beach-front bungalows. Price from $750,000.

Source: Reuters News