Carmel Valley is increasingly becoming a destination for corporate office space as companies migrate north from downtown San Diego, according to real estate experts.
"It's the most sought-after submarket in San Diego," said Robert Kuzman, a broker with Grubb & Ellis Commercial Real Estate. "That's due to traffic patterns, its proximity to a lot of tech companies, and the fact that decision makers and company owners are living in the Del Mar, Solana Beach, Carmel Valley and Rancho Santa Fe communities."
Kuzman said business owners are looking to cut their commutes in half by moving their offices to Carmel Valley as it's close to home and close to many of their clients.
Grubb & Ellis currently has seven buildings listed in Carmel Valley and despite the current economic downtown - office vacancies are up 10.2 percent from 7.8 percent last quarter - Kuzman said tenant demand remains.
He said he still sees service industry customers such as legal, accounting and software firms looking for space.
Historically, Kuzman said area has had some of the higher prices in the city for office space, but it evens out, as Carmel Valley doesn't have the additional parking charges of downtown and UTC.
The office condo
Hacienda Del Mar, the office complex off High Bluff Drive, is trying something that's never been done in Carmel Valley by selling office condos, said Kuzman.
Hacienda, which was bought last year by Cardinal Investments, just launched its high-end, luxury office condo project with seven spaces now on the market. Hacienda will hold a broker event from 11 a.m. to 1 p.m. on Oct. 23.
Mike Flaherty, a partner with Cardinal, said while there is a concern about current market conditions, for a businessperson to buy their own office is a great opportunity to control their future and own their own lifestyle.
"This is the perfect time to come in and establish a long-term hold for your company," said Nicole Fitzgerald, senior associate at Cardinal. "It's investing in yourself and your business."
They are already hearing this is the first time the somewhat exclusive building has been marketed to brokers, according to Fitzgerald.
The building was renovated over the summer, when a high-tech conference room and state-of-the-art digital directory in the lobby, were added.
The seven office condos will also come with a concierge service to handle everything from mail to dry-cleaning.
New office building
A new office building is currently in the permit process at the Neurocrine campus on El Camino Real.
Veriallance Properties, which has owned the property since November 2007, plans to erect a 93,000-square-foot building on the 280,000-square-foot campus.
That is, if in the next year, the economic situation is able to right itself, according to Veralliance principle Dan Ryan.
"We'll make a determination in the second quarter next year whether the market can support a new corporate office," said Ryan. "If we were looking at today, it probably wouldn't get built."
It also will not be built without tenants - it will not be an office that sits idle and vacant, said Eric Spoor, Veralliance construction and facilities manager.
The new building will also follow a trend in Carmel Valley of moving away from the biotech and pharmaceutical model of the past.
Neurocrine had a setback when its drug was delayed in 2007 -the company shrank from 400 employees to 125 and moved most of their company into the campus' back building. When the property was sold, what had been labs became office space.
Not only will the new building be added to the campus, but Veralliance is also looking to add two levels of underground parking, a sports court and a fitness center. A walk-up deli will also replace the campus cafeteria that now sits in the center rotunda.