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Tuesday, Jun 25, 2024

Commercial Market a Mix of Steady, Strong, Flat

The San Diego office market was relatively steady for the fourth quarter of 2005, the retail market continued to show solid leasing and investment performance, while the industrial market posted rather flat numbers across the board.

That’s the latest from CB Richard Ellis in its recently released fourth-quarter report.

Some tidbits:

– The overall vacancy rate for the office market dropped to 8.9 percent, compared with 9.6 percent at the end of last year.

– Countywide, net absorption levels totaled nearly 533,000, bringing the year-to-date total to more than 1.8 million square feet.

– Average asking lease rates continued to climb to $2.30, while new construction remained solid with more than 2.8 million square feet under construction.

– At the end of the quarter, the vacancy rate for industrial space increased to 5.9 percent, compared with 5.7 percent at the end of last quarter.

– The average asking lease rate for industrial space stayed steady at $1.02.

– More than 504,000 square feet of new industrial space was delivered to the market during the quarter.

– At the end of the quarter, the vacancy rate for retail space stayed strong at 2.2 percent.

– Countywide, net absorption levels totaled about 268,000 square feet during the quarter.

– The average asking lease rate increased during the quarter to $2.03.

– New retail developments under construction totaled close to 2 million square feet at the end of the quarter.

– – –

Home Sales Dip:

San Diego home sales dipped by 11.3 percent in December, while median home prices rose 5.1 percent, according to DataQuick Information Systems.

Overall, Southern California home sales that month fell to their lowest level in four years, as price increases eased back another notch. But DataQuick noted that a decline from November to December “is normal for the season.”

According to DataQuick:

– A total of 28,952 new and resale homes were sold in San Diego, Los Angeles, Riverside, Ventura, San Bernardino and Orange counties in December, up 4.8 percent from 27,637 in November, and down 4.5 percent from 30,317 for December last year.

– Last month’s sales count was the lowest for any December since 24,913 homes were sold in December 2001. The Inland Empire, bucking the regional trend, posted sales increases last month, led by record-breaking sales of newly built homes.

“The frenzied part of this real estate cycle is behind us, and what we’re seeing so far is a normalizing of the market,” said Marshall Prentice, DataQuick’s president. “Midmarket and entry-level homes are selling well, the move-up and prestige markets are leveling off. It’ll be interesting to see how this plays out between now and spring.”

– The median price paid for a Southern California home was $479,000 last month, the same as November’s record high. That was up 13 percent from $424,000 for December 2004.

The year-over-year increase was the lowest since March 2002, when the $257,000 median was up 12.7 percent. Year-over-year price increases peaked in May 2004 at 26.9 percent.

– The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,255 last month, up from $2,238 for the previous month, and up from $1,869 for December a year ago.

Adjusted for inflation, current payments are about 2.6 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle.

“Indicators of market distress are still largely absent,” according to the report. “Foreclosure activity is edging up from its bottom, but is still low. Down-payment sizes are stable, as are flipping rates and non-owner occupied buying activity.”

– – –

Heading North:

Meanwhile, the North San Diego County Association of Realtors released its report on the residential market for December.

According to the association:

– Median prices for all homes in North County, including single-family detached and single-family attached, was $555,000, down from $580,000 in November 2005.

– The median-priced single-family detached home in the region was $610,000 in December, a 5.4 percent decline from the $644,899 price in November.

– The SFD median home prices were highest in Rancho Santa Fe (92067) at $3.7 million, with median prices above $1 million in Rancho Santa Fe’s 92091 ZIP code, Del Mar, Pauma Valley, Bonsall, Carlsbad and Solana Beach.

ZIP codes in the lower end of prices reported SFD median prices ranging from $480,000 (Vista , 92083) to $500,000 (Oceanside , 92054).

– The median-priced single-family attached home was $415,000 in December, a 5 percent increase from $395,000 in November.

Once again, median SFA home prices were highest in Rancho Santa Fe (92091), at $820,000, followed by parts of Del Mar and Cardiff-by-the-Sea, with median prices more than $700,000; while parts of Solana Beach reported a median SFA price of $650,000.

Portions of Carlsbad, Escondido, Poway, Carmel Valley, Oceanside and San Marcos reported median SFA prices ranging from $400,000 to the upper $500,000s.

– The more affordable areas for SFA homes were in parts of Escondido, Oceanside, Vista and Rancho Penasquitos; while the least affordable areas were in Rancho Santa Fe, Solana Beach, Del Mar and Cardiff.

– – –

Rick CEO Retiring:

Lyle F. Gabrielson, the president and chief executive officer of Rick Engineering Co., billed as San Diego’s largest civil engineering firm, will be retiring effective Jan. 31.

Vice President Roger L. Ball has been elected by the board of directors to succeed him, effective Jan. 19.

The company, based on Friars Road in Mission Valley, has an additional office in Scripps Ranch, housing its landscape architecture division. With 430 employees in seven offices throughout California and Arizona, the company celebrated its 50th anniversary in business in 2005.

Founded as a civil engineering and mapping surveying company, today the firm also has divisions specializing in transportation and traffic engineering, water resources engineering, urban design and planning, redevelopment, landscape architecture, litigation and legal support, among other areas.

Gabrielson has served as the firm’s president for 22 years. Ball joined Rick Engineering in 1974 after graduating from San Diego State University.

– – –

Famous Firsts:

Swinerton Builders, a San Diego-based contractor, has started construction on the $25 million Metrowork office condo on Columbia Street, billed as the first of its kind to be built from the ground up in Downtown San Diego.

Developed by Berkson Realty Advisors, LLC, and designed by architectural firm Baldauf, Catton, Von Eckartsberg, the nine-story, 27-unit Class A office condo project includes 60,000 square feet of office space, and 20,000 square feet of retail/commercial/restaurants space. About 65 percent of the units have been sold so far.

Swinerton Builders also has completed construction of the M2i condos at 11th and Market Street in Downtown San Diego’s ballpark district. The CityMark development includes twin seven-story buildings, with 230 loft units over two levels of gated underground parking.

– – –


Otay Ranch’s Harvest Ridge, a mixed-use, affordable seniors housing apartment complex at Heritage Towne Center in Chula Vista, received a Gold Award at the 2006 Best of Seniors Housing Awards in Orlando, Fla., at the recent National Association of Home Builders convention.

Harvest Ridge, honored in the mixed-use, overall project category, was the only winning San Diego County project in the competition.

Developed by the Otay Ranch Co., Heritage Towne Center was designed by Lorimer Architecture of San Diego and built by Rimrock Construction Co. of Newport Beach. Other design team members include ADL Planning Associates of Carlsbad for landscape architecture, and Impact Interior Design of Costa Mesa.

Send residential and commercial real estate news to pbroderick@sdbj.com or via fax at (858) 571-3628.


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