Vacancy Rate for Offices Rises to 16.3% : Real estate: The increase is attributed to 840,000 square feet of space put on the market in the second quarter.

Office vacancies in the region that includes the San Fernando, Santa Clarita and Conejo valleys rose to 16.3% in the second quarter from 14% in the first quarter, according to a study by real estate firm Grubb & Ellis.

Nonetheless, the region’s commercial real estate market continued to be healthier than Los Angeles County overall, the study found. Office vacancies for all of Los Angeles County stood at 18.3% in the second quarter and reached more than 30% in specific markets such as the Los Angeles International Airport area and parts of Torrance.

The report did not include medical buildings or office buildings with less than 20,000 square feet.

Grubb & Ellis said the increase in the Valley region’s vacancy rate was due to 840,000 square feet of office space that came on the market in the second quarter, including a 600,000-square-foot building in Warner Center.

The lowest vacancy rate was in the East Valley, where just 5.4% of offices remained empty. That area, which stretches from Coldwater Canyon to Burbank, has benefited from growth in the entertainment industry.

“The East Valley continues to be the tightest office market in Southern California,� said Chris Baer, a Grubb & Ellis office properties specialist in Sherman Oaks.

The vacancy rate in the West Valley stood at 22.7% in the second quarter. That area spans from Tarzana through Calabasas, and includes the Warner Center. Although the vacancy rate remains

high in that market--primarily because of the new building in Warner Center--Baer said he expects vacancies to begin declining because there are no other buildings under construction.

In other areas, the Central Valley, which includes Encino, Sherman Oaks and Van Nuys, posted a 15.8% vacancy rate in the latest quarter; in the Conejo Valley the vacancy rate was 24.9%; and in the Santa Clarita Valley, 8%.

The study also found that a net 406,272 square feet of office space were absorbed during the second quarter, up 81% from 225,000 square feet in the first quarter. Net absorption refers to the change in occupancy from one period to the next. Baer said the first-quarter absorption rate was depressed because companies had put expansion plans on hold during the Persian Gulf War.

Construction came to a near standstill during the second quarter, as banks grew more cautious about funding new developments. Only 106,000 square feet of office space was under construction during the April-through-June period, compared to 886,000 square feet that was being built in the first quarter and 1.5 million square feet a year ago.

Meanwhile, Grubb & Ellis also found that the office market in Ventura County remained soft with a vacancy rate of 25%. However, leasing activity gained momentum, bringing the rate down from 29% in the first quarter.

A separate report by the real estate firm Cushman & Wakefield found that the second quarter vacancy rate in the region that includes the San Fernando, Conejo and Simi valleys was 17.1% for “Class A� office buildings. Class A properties were defined as well-located, professionally managed buildings that command upper-tier rental rates. For buildings other than Class A, the vacancy rate was 22.8% in the second quarter, the same as in the first quarter, Cushman & Wakefield said.

That compares with a regional vacancy rate for Class A buildings of 16.9% in the first quarter, the report said, and a 23.2% second-quarter vacancy rate in downtown Los Angeles.