Second Quarter 2008 San Gabriel Valley Office

Vacancy Rate Increases Despite Large Bank Lease This Quarter



Despite a 102,500 SF lease this quarter from Cathay General Bancorp, office vacancy rates continued to rise in the San Gabriel Valley. Net absorption was negative 66,100 SF, a slight improvement over negative 72,100 SF in the previous quarter. A higher portion of this vacant space is sublet space, which on average is 40 cents cheaper than direct vacant space.



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Basically what happened this quarter was a single large deal. Cathay General Bancorp moved their headquarters to 9650 Flair Drive in El Monte after rather extensive renovations.

If you have driven on the 10 freeway to San Bernardino, chances are you have seen this building being built (renovated) over the past year or so. It is right next to the Asian American Association in El Monte.

The San Gabriel Valley has the largest concentration of Chinese American communities in Southern California and a lot of industrial users in the area have special needs in terms of getting loans and doing business. Niche banks such as Cathay and East-West Bank are extremely important for filling a void in order to get business done.