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L. A. Area Office Rent Rates Could Double by 1990: Report

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If the trends of 9% average annual rental increases continue through the decade, office rental rates in Los Angeles County could reach $48 a square foot a year by 1990--double the current rates.

This is the view of Wade Lamming, president of Fuller Commercial Brokerage Co., Century City, a unit of A. E. LePage Real Estate Services Ltd., Toronto.

“Office rental rates didn’t escalate in a steady, orderly fashion and, in fact, declined in some years and exploded in others,” he said. “The same uneveness is expected in the next six to seven years.”

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Looking ahead to next year, he predicted that rental rates for Class A office space in Los Angeles County--now at $18-$25 a square foot--should increase sharply to $23-$30 by the second half of 1985.

Rental rates should hold steady for the first six months of 1985, then increase from 20% to 40%, depending upon location, he said.

“The major causes are increased demand returning to the marketplace and an absorption of low-cost space in older buildings that has been keeping a lid on rental rates,” Lamming added.

Currently, the county’s office market is experiencing a 16% vacancy rate. The survey indicates that an absorption of 6-7 million square feet can be expected in 1985, creating a 14% vacancy rate.

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