Lowest in L. A. Basin, Survey Shows : Office Vacancy Rate Drops to 10%
The Westside’s office vacancy rate has dropped to 10%, maintaining its status as the lowest-vacancy office market in the Los Angeles basin, according to a survey released last week by a major commercial real estate company.
Vacancy rates in other areas range up to 21% in the San Fernando Valley, with the Greater Los Angeles area including the Mid-Wilshire area and the San Gabriel Valley reporting a 17.5% vacancy rate, the survey showed.
The report by Grubb & Ellis Co. shows that for the three-month period ending June 30, 2.8 million square feet of Westside office space was vacant out of a total of 27.6 million available square feet.
The area’s vacancy rate has dropped 1% during each of the last three quarters, according to Gregg Gann, vice president and district manager of Grubb & Ellis.
The Westside has a strong record of attracting office tenants because of its beach access, mild climate, desirable housing and labor supply, he said.
The bulk of the 72,000 square feet of Westside space leased from April through June was in the Hollywood, Santa Monica and Brentwood areas, the study found.
Leasing in the Barham Plaza and the RCA Building helped trim Hollywood’s vacancy from 14% to 9%, and strong leasing activity in the Wilshire-Bundy Building helped shrink Brentwood’s vacancy to 16% from 21%, according to the report.
Santa Monica Rate Is 5%
The study showed that Santa Monica’s office vacancy rate hit a rock-bottom 5%, the lowest of any region in the Los Angeles basin, with leasing in the Santa Monica Business Park a major factor in the drop from 9% last quarter.
Westwood followed Santa Monica closely with only 6% of its office space unoccupied, the study showed.
Century City had a 7% vacancy rate, and this low rate is expected to continue because the area has limited opportunity for new construction, Gann said.
West Los Angeles has the highest vacancy rate in the Westside, with 17% of its office space unoccupied, he said.
About 4.6 million square feet of office space is under construction in the Westside, according to Grubb & Ellis. Of that amount, 1.3 million has been leased in advance of completion, including 451,000 square feet during the last quarter, the study found.
Large companies are preleasing space in buildings under construction because often they cannot find large blocks of space in existing buildings, Gann said.
The survey showed that 1.6 million square feet of office space is to be built this year, 780,000 square feet of it in the Marina del Rey area.
