Office Vacancy Rate Drops to 16.8% in Quarter

Office vacancies in the region that includes the San Fernando, Santa Clarita and Conejo valleys dropped to 16.8% in the second quarter from 18.4% in the first quarter, according to a report that tracks rental activity of relatively new, well-located and higher rental rate buildings.

In its report, the real estate firm Cushman & Wakefield said the eastern business center, clustered around Burbank and Glendale, and the western business center, consisting of Warner Center and Woodland Hills, were the most active in leasing activity during the second quarter.

Despite the increased leasing activity, the report said commercial land sales in the San Fernando Valley remained nonexistent in the second quarter because of a lack of demand for new office space. One 15,000-square-foot project was completed last quarter, and only 86,532 square feet of office space is now under construction, the report said.

By area, the report said office buildings in the west San Fernando Valley had the highest vacancy, with a rate of 24.3%, down from 25.9% from the first quarter. The central Valley had a vacancy rate of 16.1% in the second quarter, compared with 18.2% in the previous quarter, and the East Valley’s rate dropped to 13% from 14.1%.

In the Conejo Valley region that includes Simi Valley, the vacancy rate for upper-end office buildings dropped to 9.5%, from 12.6% in the first quarter.