Lighting Firm Plans Valley Relocation

SAN FERNANDO, CA-An entertainment-related company has bought a 58,000-sf industrial building here and plans to relocate its 40 workers into the complex from neighboring North Hollywood next month.

The building stands at 200 Parkside Drive, inside the Parkside Industrial Center. It was acquired by Acey Decy Lighting, which provides lighting and related services and equipment to film and TV companies.

Ross Thomas, the Delphi Business Properties broker who represented privately held seller S&C in the transaction, says Acey Decy paid $3.5 million for its new San Fernando headquarters. Chuck Eickhoff of the San Fernando Valley office of Daum Commercial Real Estate Services represented the buyer.

Broker Thomas tells GlobeSt.com that the deal reflects a growing desire by many industrial-space users in the Valley to own their buildings instead of rent them.

“Rents have escalated here to the point where the rent you’d pay under a lease would be the same or even higher than the amount you’d pay on a monthly mortgage,” Thomas says. “And when you factor-in the deductions for interest payments and depreciation and the like, the after-tax cost of owning can be a lot lower than renting.”

Indeed, a recent report by LA-based CB Richard Ellis says that the average asking lease rate in the entire San Fernando Valley hit 62 cents psf per month in the third quarter. That put it in a tie with the Tri-Cities area as LA County’s most expensive industrial market, and well above the countywide 51-cents psf average.

While rents across the Valley have softened a bit recently in step with the slowing economy, Thomas says the eastern portion of the market — which includes the City of San Fernando and North Hollywood — has fared better than many other communities to the west. One key reason is because the East Valley “has a lot of tenants involved in the entertainment business, which has continued to do pretty well even though the economy in general has gotten weaker,” he notes.

But while interest among owner-users is strong, Thomas adds, there just aren’t many buildings for sale. “We’re seeing ‘bidding wars’ break out for some properties, especially those in the 5,000-sf range,” the broker says. “Owners are demanding top-dollar, and getting it.”