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Office space still about 17% unfilled

The vacancy rate in Burbank remains higher than the county average. It was 5% a year ago.

October 24, 2009|By Zain Shauk

DOWNTOWN — Burbank and Glendale offices continued to empty through the third quarter of 2009, adding to the combined total of more than 2.3 million square feet of vacant real estate, for which demand has plummeted, experts said.

Vacancy rates swelled in the area and across Los Angeles County, where more businesses moved out of offices in all but one major sub-market, ranging from the Wilshire Corridor to the South Bay, research from multiple real estate firms showed.

While the county’s average office vacancy rate in the third quarter was 15.6%, figures climbed to 19.4% in Glendale and 17.7% in Burbank, according to the most recent data published this month by real estate firm Grubb & Ellis.

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The rates were previously 17.2% in both cities, according to the firm’s second-quarter report, but recent construction caused the increase in Glendale.

But while the completion of an 188,000-square foot property at 207 Goode Ave. added to the amount of empty space in Glendale, it was countered somewhat by 18,590 square feet of newly filled real estate.

Burbank lost 32,000 square feet of leased space during the quarter, according to the report.

The figures marked the second consecutive quarterly rise in office vacancies for both cities.

A year ago, 5% of Burbank office space was vacant, and the rate was 14.8% in Glendale, according to the report.

The countywide glut in available space has mainly been driven by cutbacks on the part of businesses that are doing more with less, said Paul Habibi, professor of real estate at the UCLA Anderson School of Management.

“The lack of demand is really created by the job market,” Habibi said. “There simply aren’t bodies available to fill office space and businesses have figured out how to expand their productivity with fewer people, and fewer people basically means less office space is necessary.”

That has caused concern in Glendale and Burbank, where officials are actively trying to draw businesses to the area from other regions.

The more office space that can be filled, the more jobs there will be in the area, said Joy Forbes, Burbank’s deputy city manager, who is part of a new business task force.

Burbank’s vacancy rate was low until two new office buildings added 800,000 square feet of property to the city, prompting efforts to quickly find tenants, she said.

Glendale officials are also focusing on drawing in new businesses and have had some success, said Ken Hitts, the city’s economic development manager.

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