Tonight, the Burbank City Council approved developer Overton Moore’s Creative Industrial, Office, and Retail business park. Boasting six industrial and nine office buildings, the Avion Burbank park will be the gem of the East San Fernando Valley.
Although two years away before the first properties are expected to be available, tenants are already drafting offers to claim their space.
Skip to 2:32:00 in video to watch me speak to Burbank City Council in support of the project.
Market Overview With a slight uptick in vacancy totaling 1.5% for warehouse distribution, landlords continue to reap the benefit. However, while sale prices are still high, Sales Volume has had a significant decrease over last year’s 3Q. Are prices going to drop? Demand continues to remain high, however pricing may have outpaced consumers.
The proposed “Avion” project would construct a business park on approximately 60 acres of vacant land adjacent to the Burbank Bob Hope Airport consisting of the following components:
Six buildings two stories high for industrial/warehouse uses totaling 1,014,887square feet;
Nine buildings two stories high for creative office uses totaling 142,250 square feet;
Two buildings one story high for retail/restaurant uses totaling approximately 15,154 square feet;
One hotel with 166 rooms;
Complete site improvements related to the project including utilities, drainage, paving, landscape, lighting, etc.
Extend, improve, and dedicate Tulare Avenue west of Hollywood Way;
Extend, improve, and dedicate Kenwood Street south to the future Tulare Avenue.
The project site is located at 3001 N. Hollywood Way, and is surrounded by industrial/storage uses (to the north and east), the Burbank Bob Hope Airport (to the west and south), and vacant parcels. North Hollywood Way abuts the easterly boundary of the project site, and North San Fernando Road is to the north, and Winona Avenue is to the south. The current zoning designations are “General Industrial (M-2)” and “Airport (AP)” and are proposed to change to “Planned Development (PD)” zoning. The project site has two General Plan land use designations, “Golden State Commercial/Industrial” and “Airport” and the entire project site is proposed to be Golden State Commercial/Industrial.
The Los Angeles county industrial market remains the tightest in the country – Xceligent Research. Despite seeing a continual feeding frenzy for industrial property, the market inventory has increased — by 0.1%. With the only new product coming online in Valencia and Simi Valley, San Fernando Valley industrial property values continues to grow by leaps and bounds.
The newest trend in the warehouse world is “Creative Rehab” which turns the dated heavy industrial brick construction into warehouse/office conversions. These properties are complete with polished concrete floors, modern lighting, full A/C, and a kitchen that would make your home jealous. It also comes with a hefty price tag of nearly $1.40 NNN per square foot for over 10,000 sq.ft. of space. In comparison the competitive market rate is between $1.15-$1.20 NNN per square foot.
Land within the Valley will continue to disappear as Overton Moore Properties’ newest project will remove land from Burbank Airport adjacent parking lots. Effectively displacing many entertainment studio vehicles and other related companies. Sending land hungry companies into Sun Valley, Sylmar, and San Fernando.
Bottom line – my opinion is lease rates will increase and sale price to follow suit.
Four new state of the art industrial buildings are rising from Simi Valley’s west end. Brought to market by Overton Moore Properties, and featuring 26′-28′ clear height with ESFR sprinklers – these will surely go fast. In fact one building is already in escrow.
Los Angeles Northwest region maintains continued low vacancy rates with only .1% increase in available space for warehouse and distribution totaling 1.1%. Direct Weighted Average Asking Rates (NNN) increased by $.01 to $.75 for warehouse and distribution but remained the same for flex property at $1.09. Unemployment also dropped for California.
In my opinion lease prices will continue at current market however sales prices will increase as users contemplate equity involvement in properties.
With very little land left for development of new property near Los Angeles, the IAC Commerce Center will be a breath a fresh air – and paint.
I attended the IAC Commerce Center “Wall Raising” ceremony complete with hard hats, SCV Economic Development Corporation, and Press Secretaries for Assemblymen. The talk was all about the newest Valencia Industrial development. The business park boasts 9 buildings and 1.3 million square feet of building space, all built on 116 acres. Currently constructing Building 1, the business park will be developed in three phases. The timeline is not currently known, but it will be beautiful by the looks of it.