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Vacancy rates 'bumping along'

April 28, 2004

Ryan Carter

Office space on the city's south side has been filling up faster this

year than last year, but elsewhere, offices are empty.

"It's bumping along," said Rob Erickson, director at Cushman &

Wakefield, a real estate service firm that brokers deals in the area

and released a recent survey of vacancies. "There's a lot of deals

out there, but they are not getting signed quickly."

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The overall vacancy rate from January to March for the 15 office

buildings in the Media District -- the southern part of the city

closest to the Ventura (134) Freeway and the studios -- was 7.9%,

according to the survey. That was a decrease from 15.8% from a year

ago, mostly due to more lease agreements at The Pinnacle building,

3400 W. Olive Ave., said Patrick Church, first vice president at CB

Richard Ellis.

Radio station owner Clear Channel recently leased 95,000 square

feet in the building, on the heels of leases signed by Warner Bros.

and Sony Digital Pictures.

In the area Cushman & Wakefield deemed the City Center -- which

includes Downtown Burbank and the area around the airport -- vacancy

rates in 32 office buildings remained relatively flat, increasing

from 30.6% in the first quarter of 2003 to 33.2% this year.

Despite the activity at The Pinnacle, brokers said office space

activity has been lethargic, with Pasadena, Glendale and Burbank

areas ending the quarter with a higher vacancy rate -- 15% -- than at

the end of 2003, 14.5%.

"The first quarter of any year is slower than remaining quarters

because the three months before the first quarter of any year is the

holiday season," said Andrew Feola, a director at Cushman &

Wakefield.

Entertainment industries drive much of the market in Burbank, and

those industries have been in a slow period, officials said. Slow

rates could change in upcoming quarters as alternative

entertainment-based firms -- such as those that produce DVDs --

flourish and the economy picks up, brokers said.

"So far, you'd have to say 2004 feels busier. There's more tours

of office spaces and more inquiries -- more activity," Feola said.

Church said as more tenants hash out leases, vacancy rates could

go down, and rental rates could rise, transforming the rates into an

owner's market instead of a tenant's market.

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