Vacancy Rate Increases for San Gabriel Valley Offices

San Gabriel Valley office vacancies increased 1.9% in the past year, bringing the rate to 35.7% as of March 31, according to Grubb & Ellis Commercial Services.

The primary reason for the increase was the completion of three major projects, the firm said. The study covered 38 buildings and the existing base is 3,053,000 square feet. More than 419,000 square feet came on line during the last 18 months.

Much of the increase came with completion of three major projects: the second phase of Puente Hills Business Center, a 125,000-square-foot, six-story structure; Crossroads Terrace in Crossroads Business Park, City of Industry, a 68,000-square-foot, four-story building, and a converted manufacturing plant in the Flair Park area of El Monte, 167,000 square feet of office and research-and-development space.

“In addition to the recently completed projects,” Grubb & Ellis’ William Kiefer said, “it is important to note that much of the current vacancy is in certain developments of lesser quality construction and/or location.

“The finest projects, which are slowly but surely leasing, have quoted rental rates as high as $1.65 to $1.92 per square foot per month full service, while the secondary product have rates between $1 to $1.40” on the same basis, he said.

Development growth was reported particularly rapid along the Orange (57) Freeway in the San Dimas-Pomona-Diamond Bar area, where construction planned this year will add 486,000 square feet of office and research-and-development space and there is a future development potential of about 1.8 million square feet.