South Bay Office Vacancies Down, but May Rise Again

South Bay office vacancy rates improved slightly to 22% in the third quarter of last year, from 23% in the second quarter, but the vacancy factor is expected to climb as still more new office space is completed, according to a survey by Grubb & Ellis Commercial Brokerage Services.

At the end of the third quarter 4.5 million square feet of the total 20 million square feet of existing space stood vacant, according to Jack Rosenberg, vice president and district manager of the firm’s South Bay office.

“Counting vacant space and more than 3 million square feet of office product under construction, we now have a four-year supply of space,” he said. The latest survey includes 253 existing, under construction and planned office buildings, representing more than 28.8 million square feet of space.

The El Segundo/Manhattan Beach area--the “hub of Southern California’s aerospace industry”--had the lowest vacancy rate at 11.6%, down from 15% at the end of the second quarter, Rosenberg said.

The second lowest vacancy rate was in the Long Beach Suburban submarket, with 15.7%. The highest vacancy rates were LAX/Century Boulevard, 37%, and Carson, 44%, the survey showed. Torrance Central had a 21% vacancy rate; Long Beach Downtown had 25%, and Torrance Freeway (the area near the Harbor Freeway and 190th Street), 31%.