Commercial brokers experiencing both good and bad times
Good times and bad times -- commercial brokers doing business in the Inland Empire are experiencing both phenomenons right now.
At least that's John Magness's opinion.
The senior vice president of Hillwood Investment Properties is helping moderate Thursday's mid-year market review hosted by the Inland Empire Chapter of National Association of Industrial and Office Properties.
Experts from CB Richard Ellis Investors, Principal Global Investors, AMB Property Corporation, Prologis and several other companies will share data gathered from the office and industrial markets throughout San Bernardino and Riverside counties.
"This is a good time for a lot of investors, and it's a rough time for a lot of investors," Magness said during a phone interview on Wednesday. "Most lenders and equity providers are rescrutinizing every dollar they put out."
While the local housing market is still taking a nose dive, the commercial real-estate market is following the same course in many areas.
Thomas Galvin, research associate at Colliers International in Ontario, says he's expecting the west-end office vacancy rate for both counties to rise even higher from a first-quarter reading of 13.2 percent. Experts consider 10 percent or below a healthy number.
"The office space is kind of getting hammered," he said. "It has to do with a lot of construction completions, especially in Corona. They started building it when the times were good and didn't anticipate things turning around so quickly."
The preliminary second-quarter west-end industrial vacancy rate for both counties is 5.4 percent Galvin said, which is up from 4.3 percent in the first quarter.
On the east end of both counties, preliminary second-quarter numbers peg the industrial vacancy rate at 16.2 percent, up from 14.4 percent in the beginning of this year, and the east-end office vacancy rate is also expected to rise.
"Some brokers are having to get creative to get deals done," Galvin said. "They're doing things that hasn't been seen in a while, like offering a year of free rent on a 10-year deal just to get someone in there."
--matthew.wrye@inlandnewspapers.com
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