제회사가 관련된 기사가 The Orange County Register의 5월6일 Internet판에, 그리고 5월8일자 일요일판 Business Section, Real Estate에 나왔습니다.
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FULLERTON – A real-estate-investment company has sold the last of 25 buildings in one of the largest industrial complexes in Fullerton – a big milestone, considering the economy's prolonged recession.
In many ways, the challenges and eventual sale of the 220,000-square-foot complex, the Valencia Business Center, reflects the difficulties the industrial real estate market faces. Its success is evidence of the continued market recovery and increase in consumer confidence, real estate experts said.
After construction of the east Fullerton center was completed in early 2008, the Magellan Group put the 25 industrial buildings, ranging from 5,000 to 24,000 square feet, on the market.
The Los Angeles-based company sold half of the buildings before the market crumbled. The situation was exacerbated when its equity partner, Lehman Brothers, declared bankruptcy, in September 2008. Sales stalled in 2009.
"We hit that wall when the market began to collapse," said Kevin Staley, Magellan Group co-founder.
Adjusting to the market
The firm went back to the market in 2010, and had to reduce prices by a third, from about $180 to about $120 per square foot.
Sales were slow, but the company sold the last building at the end of March. Tenants run businesses constructing everything from delicate optic lenses to steel-solid structures.
Scott Kim, the owner of Lattice Electro Optics, bought his building in 2008 before the market crashed. Even though he paid $205 per square foot, it was a good deal at the time and it made sense as a long-term investment to avoid the hassle of moving to different locations as he did while leasing, he said.
"Business-wise it's good," he said. "Investment wise, I lost."
Joe Yoon, who owns Venture 41, a sports-apparel-distributing company, wasn't looking to buy property but couldn't pass on the low-interest loan offered by the Federal Small Business Administration.
"You couldn't beat the price," he said.
Confidence returned?
"The last few sales suggest that there is a level of confidence that has returned," Staley said.
According to a report by CoStar, a real-estate information company that tracks such data, the industrial market vacancy rate in Orange County is improving.
The market has seen a slight decrease in vacancies since last year, currently standing at 6.3 percent. While showing stability, it is still far from its lowest numbers in 2006 when the vacancy rate was 3.7 percent. The Orange County numbers, however, are strong when compared to the national vacancy rate, which is 9.9 percent.
Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange, said this is consistent with what his group sees in its research: "It's basically stabilization in the marketplace."
Overall, he said, industrial markets have bottomed out and are improving. He warned this is only the case with existing commercial real estate, as companies are very hesitant to build new projects. The stabilization of market is an indicator that overall economy is improving, because it shows companies having a greater output, he said.
While the number of buildings sold has increased, prices continue to decline. In the fourth quarter of 2010, prices averaged $94 per square foot. In 2009, prices averaged $108 per square foot, according to the report.
"One of the biggest changes across the country is confidence," said Chris Macke, of CoStar. "We feel confident now and invest. It's going to take a while to get pre-recession levels, because the [market] was hit hard."
Recovery incomplete without jobs
Consider Terry Fleming's situation; he owns Flemings Environmental, which constructs fueling stations.
In 2008, Fleming was in the process of relocating his company from Buena Park to Fullerton. He had the money, and a building in the Valencia complex met his needs to house large equipment.
"It was everything I needed. I was a little nervous, but I made the sacrifice," he said about buying the building.
Valencia Business Center's success is a good sign for the economy. But not everything.
CoStar's Macke points out that overall improvement in the real estate market and the economy depend on job growth. And the four company owners interviewed said they are being cautious and don't plan to expand just yet.
"The future of commercial real estate is squarely in the hands of corporate America and their hiring plans," Macke said. "I am hopeful they will continue to increase their rate of hiring, because the vacancy rate is 100 percent tied to employment growth."
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