Big Things Happening in the Tri-Cities?

LOS ANGELES—The Tri-Cities markets have been on fire, with more and more investors eyeing opportunities in the market. Now, Avison Young is rolling out an expansion in the market. The brokerage firm has tapped Chris Baer and Brian Hennessey for the office. Baer will serve as principal while Hennessey will serve as SVP. The two are office experts in the Tri-Cities market and say that there are plenty of reasons to be bullish in a market with very strong fundamentals.

“There are really some positive aspects about being in the Tri-Cities market right now. Vacancy rates are decreasing, absorption rates are decreasing, there is virtually no new construction in office or industrial, and rents are going up,” Baer tells GlobeSt.com. “In fact, rents increased 3% last year. We are starting to see a migration of companies coming from the Westside due to pricing. Investment sales are steady and there are still some large blocks of space that can be leased up. We are seeing the market firing on every cylinder. Those are really the main reasons that we are bullish on the marketplace.”

Much of the office growth comes from creative tenants seeking more affordable office space. “Creative tenants are definitely moving into the market,” explains Baer. “We specialize in Burbank, and that market has seen a huge influx of tenants this year, and all of them were entertainment related. The leases have been done in market or tenants migrating to the market because of commute time. For example, Nickelodeon signed two leases totaling 314,000 square feet, and those came from outside of the neighborhood. We also finally got our first co-working space with WeWork. They just signed 75,000 square feet.”

In terms of demand, the Tri-Cities, namely Burbank, which has seen a lot of the office growth, is staying competitive with the Hollywood, Downtown Los Angeles and the Westside. “Over the last few years, those tenants have definitely gotten a larger share of the tenant base,” says Baer. “They were getting higher rents and had more absorption. We have found that entertainment companies are starting to have two locations; one on this side of the hill and one on that side of the hill, to accommodate employees, keep commutes down and keep rents reasonable.”

LOS ANGELES—The Tri-Cities markets have been on fire, with more and more investors eyeing opportunities in the market. Now, Avison Young is rolling out an expansion in the market. The brokerage firm has tapped Chris Baer and Brian Hennessey for the office. Baer will serve as principal while Hennessey will serve as SVP. The two are office experts in the Tri-Cities market and say that there are plenty of reasons to be bullish in a market with very strong fundamentals.

“There are really some positive aspects about being in the Tri-Cities market right now. Vacancy rates are decreasing, absorption rates are decreasing, there is virtually no new construction in office or industrial, and rents are going up,” Baer tells GlobeSt.com. “In fact, rents increased 3% last year. We are starting to see a migration of companies coming from the Westside due to pricing. Investment sales are steady and there are still some large blocks of space that can be leased up. We are seeing the market firing on every cylinder. Those are really the main reasons that we are bullish on the marketplace.”

Much of the office growth comes from creative tenants seeking more affordable office space. “Creative tenants are definitely moving into the market,” explains Baer. “We specialize in Burbank, and that market has seen a huge influx of tenants this year, and all of them were entertainment related. The leases have been done in market or tenants migrating to the market because of commute time. For example, Nickelodeon signed two leases totaling 314,000 square feet, and those came from outside of the neighborhood. We also finally got our first co-working space with WeWork. They just signed 75,000 square feet.”

In terms of demand, the Tri-Cities, namely Burbank, which has seen a lot of the office growth, is staying competitive with the Hollywood, Downtown Los Angeles and the Westside. “Over the last few years, those tenants have definitely gotten a larger share of the tenant base,” says Baer. “They were getting higher rents and had more absorption. We have found that entertainment companies are starting to have two locations; one on this side of the hill and one on that side of the hill, to accommodate employees, keep commutes down and keep rents reasonable.”