Santa Clarita Valley Business Facts

We are home to three major industrial parks, Centre Pointe, Rye Canyon and the Commerce Center. The Gates King Industrial Park has been approved and hopefully grading will start soon. This project can bring an additional 8,000 to 9,000 jobs into the valley. Due to our physical geographical isolation from the San Fernando Valley we enjoy our own strong economy. Even in challenging times we are not nearly affected as much as other areas within the state or country.

We are also home to several fine retail centers and class A office space located throughout the valley. Even though Santa Clarita has a rich history most of the construction is newer. The few older areas are slated for impressive re-development.

We are fortunate to have a proactive city staff and council. One current project is the “One Valley One Vision.” It is to cooperatively work with the County of Los Angeles with regards to the zoning and the future planning of developments. Another is to create a “live, work and play” environment. But the main focus is keeping the housing/jobs ratio balanced. The City’s informative website which is located at www.santa-clarita.com is a useful tool. There you will find detailed demographics, history, community calendar, etc. I find the GIS mapping service has a wealth of information. It not only has parcel lines overlaid on the aerials but has zoning layers, topo’s down to 5 feet increments, flood zones, fire zones, re-development zones, etc.

Santa Clarita has its own stimulus package; it’s called SHOP LOCAL. It works. Another plus for the Santa Clarita economical strength is the fact that most of the incorporated City is within the Enterprise Zone. This creates attractive tax breaks for those moving here, starting up or hiring local. Check with the City or a local Enterprise Zone specialist for details. The City’s Economic Development Department is doing a great job in recruiting dream businesses to our valley.

RETAIL UPDATE: New vacancies are on the rise and some tenants are falling behind on their rents. But on the other hand many new businesses are opening up. Businesses are expanding to larger facilities for the same rent they were paying at their smaller units. The cost of moving is being covered by tenant improvement allowances and a few free months rent. Now is a good time to expand if you are in a position to. Landlords are giving generous tenant improvement allowances and rent consideration. The rents are somewhat holding strong in the newer centers. CAP rates are in the 6.5% range but moving closer to double digits on the older buildings.

INDUSTRIAL UPDATE: The purchase price per square foot has not dropped at the same proportion as the lease rates. Some smaller units have dropped from $300.00 per foot to maybe $235.00 where the rents have gone in some cases from $1.50 down to 50 cents. This is not across the board. Things are more aggressive but not panicky at this point. There is still money out there.

OFFICE UPDATE: I have seen several different numbers on vacancy, some north of 25%. It is hard to quantify due to the fact that some owners are taking buildings offline, others are vacant for various reasons not directly due to the economy. I am seeing class A building owners approaching tenants whose leases are up in 2009 and offering rent reduction incentives to re-new. These reductions are going from the $2.85 – $2.95 range down to $2.35 and even $2.25.

LAND COMMERCIAL/INDUSTRIAL UPDATE: Flat-lined. At least from what I have seen. However this is a great time to buy un-entitled land due to the two or three years it takes to get a project permitted. There are a lot of hungry engineers out there to help out with water issues and mitigation measures.

If you a broker, property manager or building owner sends me your listings I will include them here. You can contact me at [email protected].