Office Leasing Makes Strong Showing in ’85
Downtown Los Angeles, a constant national leader in building activity as measured by commercial construction, is gradually adding apartment buildings to match our office towers.
A story elsewhere on this page describes the major scope of downtown’s newly announced 972-unit apartment complex, Grande Promenade, within the Bunker Hill Redevelopment Project.
Overall, in commercial and residential building permit values, Los Angeles continues to lead the nation’s 200 largest cities, and by Dun & Bradstreet’s as yet unannounced year-end tabulations, final 1985 tallies will almost certainly place Los Angeles at the top, trailed by New York, Dallas and San Diego, a spokeswoman said.
While there is an obvious overabundance of office space--no one’s calling it a glut yet--its availability over the past year and its continuance translates into concessions--such owner inducements as a year’s free rent, above-standard tenant improvements, limits on rent escalation and lease renewal and expansion options.
While about 24 million square feet of office space is available now throughout the city, 1985 was a record year in leasing, with nearly 12 million square feet of space committed, an increase of 33% over 1984. Of the record amount leased, more than 6.7 million square feet involved new buildings, according to Howard Sadowsky, senior vice president and manager of the Los Angeles office of Julien J. Studley Inc., national realty leasing, sales and consulting firm.
He pegs the vacancy rate for office space throughout the city at 12.6%, compared with the national rate of 15.8%. (In another survey, by Grubb & Ellis, the downtown Los Angeles office market vacancy rate is placed at 18%.)
Of the 24 million square feet of space available throughout the city, 15 million feet is in new buildings. While space availability has increased by about 2.8 million feet since a year ago, construction activity leveled off during the last half year, Sadowsky said.
Aggressive leasing activities and stabilization of new construction being added “contributed to a very live leasing market in Los Angeles during 1985,” he added.
The aggressiveness included the aforementioned inducements and was coupled with the wide realization that Los Angeles has firmed up its position as the “financial capital of the West” in the eyes of the nation and foreign countries as well.
“If you want to make it in the West, you must be in Los Angeles. We are also a city with tremendous depth and diversity. We do not rely on one industry. We are home to the entertainment industry, we have a large number of the aerospace and airline companies, computers, banking, oil, insurance--all playing a big part in the growth and expansion of the city,” he said.
“Los Angeles is also the gateway to the Pacific Rim. Attracting companies from the Far East, whether it be foreign banks, trading companies or expanding corporate tenants, they target Los Angeles as the place they house their offices.”
He pointed out how New York-based banks, responding to Los Angeles’ emergence as the country’s western banking headquarters, “dramatically increased their presence in downtown Los Angeles during the last year,” noting that Chase Manhattan, Manufacturers Hanover and Citicorp became anchor tenants in new downtown projects and subsequently had the projects named for them.”
Law firms representing those financial giants have also moved westward and taken space in prominent downtown, Century City and Westside offices.
” . . . but the ‘great deal’ may not be around in six months or so,” Sadowsky warned. “For example, downtown buildings are leasing space at a rapid rate and . . . we will not have a lot of quality office space available within 12 months. More important, most of the new buildings under construction or recently completed, are better than 50% leased, with Citicorp receiving the most attention--over 75% leased. And an interesting note is that the total cost to a tenant for office space downtown is cheaper than on the Westside.”
The Westwood area has four projects totaling more than 1 million square feet planned or under construction for the next few years. Currently, there are about 6 million square feet available there and 1.5 million square feet about to break ground. That would create a 2 1/2-year supply of office space.
Following is a list of new buildings under construction or recently completed in the greater Los Angeles area and with space available:
DOWNTOWN
Floors Total Area Crocker Center Phase 55 1,080,000 Crocker Center Phase II 54 1,042,000 Chase Plaza 22 435,000 California Plaza Phase II 42 960,000 Citicorp Plaza Phase I 41 895,000 Figueroa Plaza I 16 303,000 International Tower 22 342,000 Wilshire-Bixel 16 278,000 Wilshire Financial 36 350,000 Biltmore Place 25 129,000 One Thousand Wilshire 21 450,000 Crown Plaza, 627 S. Olive 9 91,500 Total 6,355,500
MID-WILSHIRE AND HOLLYWOOD
Floors Total Area 145 South Fairfax Ave. 5 57,254 3699 Wilshire Blvd. 12 300,000 4751 Wilshire Blvd. 3 96,000 4221 Wilshire Blvd. 4 140,000 6100 Wilshire Blvd. 15 203,000 6500 Wilshire Blvd. 22 436,000 8981 Sunset Blvd. 5 37,000 4525 Wilshire Blvd. 3 63,000 3530 Wilshire Blvd. 18 382,000 5700 and 5750 Wilshire Blvd. 6 (each) 1,000,000 Total 2,714,254
BEVERLY HILLS AND CENTURY CITY
Floors Total Area 1840 Century Park East 16 300,000 1925 Century Park East 23 411,000 2121 Avenue of the Stars 34 649,000 10390 Santa Monica Blvd. 4 80,000 50 North La Cienega Blvd. 3 68,000 Total 2,305,200
WESTWOOD AND WEST LOS ANGELES
Floors Total Area 10474 Santa Monica Blvd. 3 52,740 10780 Santa Monica Blvd. 4 90,000 Westwood Gateway 22 303,600 Wilshire, Bundy 14 284,000 Olympic Centre 11150 Olympic Blvd.* 11 149,000 11175 Santa Monica Blvd. 4 57,500 11999 San Vicente Blvd. 3 55,600 1950 Sawtelle Blvd. 3 102,000 Westside Towers 12 242,700 11835 W. Olympic Blvd. Westside Towers 12 155,700 11845 W. Olympic Blvd. Wilshire Brentwood Plaza 15 239,500 12100 Wilshire Blvd. 18 347,000 Gateway Los Angeles 13 150,000 Filmcorp Center 8 306,000 One Westwood, 10990 Wilshire Blvd. 17 197,600 Wilshire-Granville 24 315,000 Olympic Sawtelle 9 60,000 Wilshire/Glendon 14 185,000 Wilshire/Midvale 27 200,000 Bundy/La Grange 8 159,000 Total 3,774,140
* 5 floors are parking
SANTA MONICA
Floors Total Area 520 Broadway 6 97,000 Colorado Place, Building B 3 90,000 429 Santa Monica Blvd. 7 78,600 Wilshire/Harvard 6 56,400 2600 Colorado 5 315,000 Total 637,000
FOX HILLS AND AIRPORT
Floors Total Area Howard Hughes Center 16 307,000 Kilroy Airport Center Tower V 12 291,000 9800 La Cienega Blvd. 14 338,000 5777 West Century Blvd. 16 520,000 Western Federal Bldg. 3 118,000 100 Corporate Point 3 106,000 200 Corporate Point 3 100,000 300 Corporate Point 3 100,000 222 Sepulveda Blvd. 24 534,300 12552 City Nat’l Bank Bldg. 3 84,000 4553 Glencoe Ave. 2 72,000 Rosecrans/Aviation 3 75,000 Continental Grand Plaza 6 240,000 501 Continental 2 70,000 1940 Mariposa 2 85,000 2130 Mariposa 2 90,000 The Grand Way 12 240,000 Total 3,370,000
WEST SAN FERNANDO VALLEY
Floors Total Area The Trillium, 6336 Canoga Ave. 17 285,000 Westhills Plaza 3 88,000 18425 Burbank Blvd. 6 95,000 21600 Oxnard 20 350,000 20501 Ventura Blvd. 3 80,000 Warner Center Business Park II 3 345,000 Informatics Building 3 84,000 21800 Oxnard 12 206,000 20750 Ventura Blvd. 4 150,000 Chatsworth Tech Center 2 260,000 LDM Building, 6800 Owensmouth Ave. 3 80,000 20001 Prairie St. 2 60,000 Total 2,083,000
EAST SAN FERNANDO VALLEY, BURBANK AND GLENDALE
Floors Total Area AIC Plaza, 13245 Riverside Drive 6 75,000 American Savings Plaza 21 373,600 Galleria Tower, 100 Broadway 12 147,000 10 University City Plaza 36 750,000 330 North Brand Blvd. 12 316,000 303 North Glen Oaks 10 171,000 Sherman Oaks Professional Plaza 6 80,000 Sherman Oaks Tower 15 265,000 16030 Ventura Blvd. 6 155,000 4130 Cahuenga Blvd. 4 77,000 Central Park, 3500 N. Olive Ave. 14 235,000 3800 Alameda Ave. 21 404,000 425 Colorado 7 118,600 Encino Terrace Center 6 385,000 Noble Professional Center 4 51,000 16801 Ventura Blvd. 6 170,000 First Financial Plaza 6 210,000 101 South First Street 4 62,000 Business Arts Plaza, 3601 W. Olive Ave. 8 133,000 Barham Plaza, 3800 Barham Bl. 5 85,000 2600 W. Olive Ave. 10 143,000 12001 Ventura Place 6 66,500 11365 Ventura Blvd. 3 70,000 4100 Riverside 4 51,400 6400 Laurel Canyon Blvd. 6 87,000 Laurel Plaza 3 90,000 300 Magnolia Ave. 6 65,000 425 Broadway 4 73,600 Total 4,909,100
