Ventura County board gives OK to Ahmanson Ranch megaproject.

The 5,400-acre Ahmanson Ranch development in Ventura County moved a step forward in the fourth quarter with the Ventura County Board of Supervisors' approval of the project, which would create a self-contained city including homes, apartments, condominiums, office buildings and retail space.

Construction remains at least three years away. But Virginia Weathers, director of special projects for Ahmanson Land Co., which is developing the project on land it and comedian Bob Hope now own, said the company is proceeding despite today's weak real estate market because so much preliminary work needs to be done before construction can begin.

"We have to spend a lot of time doing the tract mapping and the grading, and building a whole infrastructure before construction can proceed," Weathers said.

Construction of the $1 billion development, which would be built out over 15 years, would probably begin in late 1995 or early 1996 at the soonest, she estimated.

"Our timing may be fortuitous. We didn't have this planned according to a market three years out from now, but it may work out that way," Weathers said, a reference to the feeling among many in the real estate industry that an economic turnaround is several years away.

Weathers said the "self-contained city" would occupy approximately 3,100 acres of the 5,400-acre Ahmanson Ranch property. Ahmanson would dedicate the 2,300 remaining acres to open space, to be combined with about 7,700 acres of adjacent open space owned by entertainer Bob Hope. As part of the deal, Hope agreed to sell his 7,700 acres to the Santa Monica Mountains Conservancy for $29.5 million and Ahmanson agreed to turn over its 2,300 acres to the conservancy as part of its conditions for project approval.

Ahmanson's project calls for 3,050 detached houses, apartments and condominiums, along with 400,000 square feet of office and retail space. The county supervisors on Dec. 15 voted 4-1 for a general plan amendment to permit the project, which has drawn criticism from environmental groups and from Los Angeles officials who say it would generate too much traffic on nearby county and city streets.

Weathers said, to reduce traffic, the project has been designed as a "pedestrian-oriented community, with everything built into the infrastructure, including the schools, a library and a town hall."

Ahmanson Ranch is by far the largest and one of the few developments of any kind in the pipeline for Ventura County, where the office vacancy rate increased during the fourth quarter despite a lack of new construction.

Tim Grant, a senior associate at brokerage firm CB Commercial Real Estate Group Inc., said the Ventura County office vacancy rate was 24.8 percent at the end of 1992, compared with 23.9 percent at the end of 1991. A year-end survey by brokerage firm Grubb & Ellis Co. also pegged the vacancy rate at 24.8 percent.

Grant said vacancies in the county's various submarkets ranged from 19.1 percent in the Conejo Valley to 27.8 percent in the "Coastal Plain," which includes the cities of Ventura, Oxnard and Camarillo.

He attributed the rising countywide vacancy rate to continued downsizing by tenants, companies closing offices and defense industry cutbacks that affected contractors who depend on military bases at Point Mugu and Port Hueneme.

But Grant said there was "a noticeable increase in leasing activity" in the fourth quarter because many companies have a more optimistic outlook about the economy. That optimism should translate into improved long-range prospects for Ventura County commercial real estate. He said many tenants have been delaying expansion plans and other real estate decisions while waiting for signs of an upturn.

"Once the upswing in the economy is confirmed, county vacancy rates should fall below 20 percent," he said.

According to the Grubb & Ellis, the low-rise garden offices that constitute most of Ventura County's office market sprang up from the 1960s through the 1980s as a result of oil and defense industries' growth, coupled with lower lease rates than Los Angeles County.

But oil and defense have been downsizing, and L.A. landlords have reduced their rates, so most of the leasing now is from "local tenants shifting their locations to improve their image and/or cut their costs," stated a Grubb & Ellis' year-end report.

According to Grant, Ventura County's industrial real estate picture differs slightly from its office picture. He said industrial vacancy rates fell in Camarillo, Oxnard and Ventura during the fourth quarter, with the biggest drop coming in Camarillo, which dipped from 22.6 percent at the beginning of the quarter to 16.8 percent at year end. That was primarily a result of Everest & Jennings Co. selling its empty 484,000-square-foot building to Technicolor Inc., which relocated from Newbury Park, explained Grant.

After 18 months of falling, Grant said, "indications are that lease rates have finally bottomed out" in the industrial market. But the sales price of industrial property is expected to continue sliding, he said, because sales have stalled even though sellers have reduced asking prices.

Grubb & Ellis reported the county's overall industrial vacancy rate decreased to 15 percent at year-end 1992, after peaking at 17 percent in 1991. While considerably improved, the industrial vacancy is still considerably higher than its 12-percent low point of 1988. Area brokers estimated the lack of new construction and a possible reduction of lending restrictions could reduce the vacancy to 14 percent this year.

CB Commercial's survey of retail space showed vacancies in that sector dipped to 8.6 percent at year end, compared with 8.8 percent at the end of the third quarter. CB Commercial's report stated the relatively slight change reflected "continual flat retail sales combined with a lack of financing for new businesses."

Grubb & Ellis' report on the retail market showed a year-end vacancy rate of just over 9 percent, but it predicted a drop to below 9 percent by the end of 1993, despite 646,000 square feet of scheduled new retail construction.

The new construction will include Mission Bell Plaza, a 126,000-square-foot center under construction in Moorpark, which will be anchored by a K-Mart store.

Grubb & Ellis predicted the space would be quickly absorbed because "all of the centers have preleased between 90 percent and 100 percent of their speculative shop space, a prerequisite to securing their construction loans."