Sonoma County office vacancy rates decreased in the third quarter to 22.7 percent 13.7 million square feet from a peak of 24.8 percent at the end of last year and was about the same as it was in the fall of 2009, according to Keegan & Coppin.
Big office leases in the county in the third quarter include Sebastopol-based camera bag maker Lowepro USA's 23,000-square-foot lease of a floor in Cornerstone Properties' former Cisco Systems building at 1435 N. McDowell Blvd. in Petaluma. First California Mortgage leased another floor in the same building earlier this month.
Among a number of recent office leases with net absorption was Broadcom's five-year lease renewal of Teknovus' 25,000-square-foot office at 1351 Redwood Way in Petaluma, an arrangement that had been month-to-month previously, according to Keegan & Coppin partner Chris Castellucci, who represented the property owner with Matt Storms. Broadcom acquired Teknovus earlier this year.
However, Alcatel's leases on about 150,000 square feet of class A office space in Petaluma are set to start expiring in coming months, noted Steven Leonard of Cassidy Turley BT Commercial.
The Marin County office vacancy rate increased to a new high of 27.8 percent of 7.1 million square feet, with nearly 67,000 more square feet made available than leased in the past 12 months, according to Keegan & Coppin.
Cassidy Turley BT figured the third-quarter office vacancy in the county to be nearly 22 percent, up from 20.3 percent in the second quarter.
“Slow, steady growth with serious issues remaining” seems to be an appropriate description on Marin’s office market and the economy in general," said Brian Foster of Cassidy Turley BT.
For instance, 85,000 square feet of third-quarter leases in Marin to Kaiser Foundation Health Plan, BioMarin, Cardiology Associates, Radiant Logic and Solar Power Partners were offset by Disney's ImageMovers Digital putting its 119,000 square feet of office space at Hamilton Landing on the market for sublease, according to Cassidy Turley BT.
Meanwhile, in the large business parks at the south end of Napa Valley, the office vacancy rate rose to 16.2 percent of 2.5 million square feet from 14.6 percent at the mid-year point and 13.2 percent at the end of last year, according to Keegan & Coppin.
Colliers International figured third-quarter office vacancy in the parks to be 25.4 percent, up slightly from 24.5 percent.
Industrial vacancy in south Napa Valley was 12.1 percent of 13.1 million square feet in the third quarter, down from 12.6 percent in mid-2010 but up from 10.8 percent at the close of 2009, according to Keegan & Coppin.
One of the contributing factors to third quarter space available was 361,000 square feet put on the market at 80 Technology Court in south Napa.
Colliers estimated vacancy for large south valley warehouses was 13.2 percent in the third quarter, up from 9.9 percent at the end of the second quarter. Contributing to that is Trans Bay Steel's 130,000-square-foot Cordelia facility, which became available after the fabricator sold off its equipment in April, according to auction records.
The owners of the business continue to operate Albany Steel in the East Bay, according to manager Rich De Veau.
In Solano County, industrial vacancy increased to 16.0 percent in the third quarter from 14.9 percent in mid-2010, according to Colliers.
Office vacancy in the county stayed about the same at 27 percent.
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California Service Bureau, a subsidiary of one of the nation's largest accounts-receivable management companies, is growing the size of its Novato headquarters by about 50 percent in a move planned by the end of the year to 18,000 square feet of top-class office space at 100 Wood Hollow Lane in the same city, according to Brian Eisberg of Cornish & Carey Commercial Newmark Knight Frank.
Mr. Eisberg represented building owner Lexington Lion Wood Hollow LP with Haden Ongaro and Mark Carrington also of Cornish & Carey Commercial in negotiations for the five-year lease, with options on more space. Matt Storms of Keegan & Coppin represented California Service Bureau.
The deal brings total leasing in the 126,000-square-foot formerly vacant GreenPoint Mortgage building to 50,000 square feet, with BioMarin Pharmaceutical set to move into 30,000 square feet this week and Quadrant Data Systems moving in early this year.
Another lease is pending that could bring the building to half occupancy by year-end, according to Mr. Ongaro.
Started in 1968, California Service Bureau specializes in managing receivables and collections for health care as well as local courts and governments. It has about 75 employees in Novato, located in an older building at 9 Commercial Blvd. The company was sold in 2005 to True North AR, which was acquired by Massachusetts-based EOS CCA in May of this year.
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Luther Burbank Savings of Santa Rosa is reviewing multiple offers received in mid-October to purchase 620 Third St. in the downtown Santa Rosa, according to Russ Mayer, a Keegan & Coppin agent marketing the property. He said the property has received a number of inquiries, but he declined to say how many offers or counteroffers were submitted.
It includes a 20,000-square-foot building under lease through 2016 to SR Entertainment Group for six-screen 3rd Street Cinema.
Novato-based 620 Third Street LLC received preliminary approval from the city to build a 14-story mixed-use building called The Comstock. However, that came just when the housing market started to deteriorate and the cost to build the project was more than the possible sale price for the 116 planned condominiums. The entitlements aren't being offered with the sale.
The bank took back the property Jan. 29 in a trustee's sale after default last year on more than $4.5 million in outstanding debt.
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Janitorial supply company Armstrong Paper Group signed a five-year lease for nearly 30,000 square feet of warehouse space at 2329 Circadian Way in Santa Rosa Corporate Center and plans to move Nov. 1 from its facility near the Charles M. Schulz-Sonoma County Airport, according to Barry Palma of Cornish & Carey Commercial Newmark Knight Frank.
"There seems to be good activity in the marketplace and large tenants floating around," he said.
Mr. Palma represented landlord Santa Rosa Corporate Center Associates LLC, and Tony Lucchesi of Cassidy Turley BT Commercial represented Armstrong.
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Submit items for this column to Jeff Quackenbush at jquackenbush@busjrnl.com, 707-521-4256 or fax 707-521-5292.
