Area Office Market Strong in First Half

The office market in Los Angeles and Orange counties remained relatively strong during the first half of the year, but there were signs that the market’s performance will fall below last year’s results, according to a regional real estate survey.

The vacancy rate for all classes of office space remained relatively stable, falling to 11.8% at midyear 1999 from 11.9% at the end of last year, according to Delta Associates, the research arm of Transwestern Commercial Services.

However, the report said vacancy rates will probably rise modestly as the amount of office construction grows and will probably exceed demand. About 7.8 million square feet of office space was under construction at the end of June, about 500,000 square feet more than was underway six months earlier.

“Rents continue to increase, but at more moderate levels than in previous years,” the report said.

“Investors showed more interest in the L.A. Basin in the second quarter, yet overall investment activity is still a bit behind last year’s pace.”