Office Vacancies Off Slightly As Biotech Leads in Leasing

Office Vacancies Off Slightly As Biotech Leads in Leasing

Family-Owned Roel Construction Turns 85

REAL ESTATE by Mandy Jackson, Staff Writer

Vacancy in San Diego County office properties was nearly the same at the end of the second quarter as it was in the previous quarter, according to San Diego-based Burnham Real Estate Services.






The office vacancy rate decreased from 12.3 to 12.2 percent in the second quarter. During the three-month period, 680,110 square feet were absorbed, but 735,440 square feet in new buildings was put on the market.






Of the 1.65 million square feet currently under construction, Burnham reports that only 37 percent is preleased.






Mike Philbin, Burnham’s managing director of transaction services, said by the end of the year vacancy decreases may be more notable.






Burnham reports the biotech industry took almost 60 percent of the office space leased in the second quarter.






New York-based real estate services company Insignia/ESG Inc. reports that biotech companies signed three of the top four leases in the county in the second quarter. They were AMN Healthcare (170,000 square feet), Cell Gene (78,202), and Pfizer (61,203).






According to Insignia, office lease rates averaged $2.34 per square foot per month as of the second quarter. Class A office rental rates dropped slightly, from an average of $2.88 to $2.84 from June 30, 2001, to June 30, 2002.






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85th Year: San Diego-based Roel Construction Co. Inc. is celebrating its 85th anniversary.






Tom Roel founded the company in 1917 in North Dakota. In 1936, his son Paul Roel took over leadership of the company, and Stephen Roel succeeded him in 1987.






Roel was incorporated in 1952 and moved to San Diego in 1959. Tom Roel’s great-grandson, Kevin Elliott, is now the company’s president.






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Top Builders: For the second consecutive quarter, Texas-based D.R. Horton was the top homebuilder in San Diego County during the second quarter based on net sales, according to San Diego-based analyst MarketPoint Realty Advisors. The company sold 2,352 homes.






The rest of the top five builders were Los Angeles-based KB Home with 1,602 sales, Miami-based Lennar Homes with 1,368, Irvine-based Standard Pacific Homes with 1,355 and New Jersey-based K. Hovnanian Cos. with 1,233.






Local builders on MarketPoint’s second quarter list were No. 17, McMillin Cos. with 409 sales; and No. 19, Barratt American Inc. with 373.






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Realty Income: Escondido-based retail real estate investment trust, Realty Income Corp., reported net income available to stockholders of $16 million for the quarter ended June 30. A year earlier, net income was $11 million.






The number of shares outstanding during the second quarter increased to 33.4 million shares, up from 28.5 million a year earlier.






Realty Income reported a 26.4 percent increase in its funds from operation in the second quarter to $23 million from $18.2 million a year earlier.






The REIT sold 1.55 million shares priced at $33.40 per share in a public offering that closed on July 24.






The cash will be used to repay a portion of the outstanding debt for a $200 million unsecured acquisition credit facility, which was used to purchase more than $86 million worth of properties in the first half of the year.






On July 26, the stock closed at $32.99. Traded on the New York Stock Exchange under the symbol O, its 52-week range was $26.45 to $37.10.






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New Products: Missouri-based Xceligent Inc., which operates locally controlled commercial real estate data exchanges in San Diego and seven other cities, announced the launch of two new products on its Web-based service.






On July 15, the company launched Tenant ProspeX, which allows real estate brokers to search for tenant information online.






In San Diego County, Xceligent will offer verified sales comparables in October as the exclusive distributor for SiteComps Inc.






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New Office: San Diego-based construction company Wermers Cos. recently completed construction and moved into its new offices at 5120 Shoreham Place, Suite 150 in the Governor Park area of San Diego.






The 6,000-plus-square-foot lease is one of many bringing the 39,000-square-foot building owned by Los Angeles-based Arden Realty Inc. to nearly 100 percent occupancy.






Only 2,000 square feet are left in the building. The largest tenant is Mohomine, which took 13,958 square feet.






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Completed: Pacific Building Group of San Diego has completed construction of the 75,811-square-foot offices for the State Compensation Insurance Fund in the Pacific Corporate Center at 10105 Pacific Heights Dr. in San Diego.






The $2.55 million project took place on four floors that will house 300 employees. The superintendent on the project was Pat Piro and the project coordinator was Leah Duncan.






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Topping Off: San Diego-based Intracorp’s 53-unit Pacific Terrace condominium project has been “topped off” , the last of the structural steel was placed at the top of the structure , in Downtown San Diego near the Gaslamp Quarter.






Construction is on schedule for a Spring 2003 ending. The project’s six remaining one- and two-bedroom units are priced from the high $300,000 range to the mid-$400,000 range.






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Final Notes: Tucker Sadler Noble Castro Architects of San Diego has completed the design for $5 million in renovations for the Johnson, Rowan and Hancock elementary schools in the San Diego Unified School District. The yearlong construction projects will begin in January.






Send residential and commercial real estate news to Jackson via fax at (858) 571-3628 or via e-mail at

mjackson@sdbj.com.

Call her at (858) 277-6359, Ext. 114.