Greater Los Angeles office markets stabilize

Most office markets in Greater Los Angeles have stabilized, as average asking rental rates of $3.32 per square foot per month remain unchanged from first quarter 2018, according to Cushman & Wakefield’s “Greater Los Angeles office second quarter 2018” report.

Despite some uncertainties around the length of the current cycle, Greater Los Angeles market fundamentals remain strong and healthy at mid-year 2018, with some fundamentals outperforming last year.

Asking rental rates are up 4.4 percent year-over-year, with the strongest growth in L.A. South, with an increase of nearly 14 percent. New inventory throughout Greater Los Angeles delivered at the end of 2017 caused a year-over-year increase in overall vacancy of 100 basis points. A significant rise in overall vacancy during the second quarter was seen in South Park. Transamerica vacated 150,000 square feet at 1150 S. Olive St., spiking vacancy rates in the submarket to 20.4 percent, a 7.9 percent surge from the first quarter.

Year-to-date leasing activity of 6.6 million square feet in first half 2018 is on track to outpace 2017 year-end leasing activity of 12 million square feet. L.A. West led the way and L.A. Central was not far behind, with 1.6 million square feet and 1.4 million square feet, respectively.

Four of the key office sales transactions second quarter 2018 were in L.A. South. In terms of size, the largest trade was the Torrance Tech Campus, which was purchased by Platform & PMRG from FRM Associates for $216 per square foot. L.A. West continues to commands the highest per square foot, such as with the sale of 331 N. Maple Drive in Beverly Hills for $925 per square foot. Tri-Cities had the highest number of sales, with seven transactions or 35 percent of the deals done across Greater Los Angeles.

To read the full report, click here.