Office Rents Inch Upward in Tight Southland Market
Office leasing across Los Angeles and Orange counties remains strong, with vacancies declining and rents rising--albeit modestly--across most of the region, according to local real estate experts who spoke at an industry conference last week.
In some markets, such as L.A.’s Westside and the west San Fernando Valley, rents are approaching levels not seen since the late 1980s.
On the Westside, “We are seeing the highest rates and tightest market in 15 years,” Cresa Partners broker Matthew Miller said Thursday during his presentation at the Real Estate Summit, an annual conference sponsored by the Building Owners & Managers Assn. of Greater Los Angeles.
There are even signs of hope for long-beleaguered downtown Los Angeles, where new sports and cultural facilities and a lack of new office construction has resulted in rising rents at top-notch properties. The opening of Staples Center “will generate a lot of interest in the market by bringing new people downtown,” said Bradley T. Cox, who heads the regional operations for Cushman & Wakefield of California Inc.
Entertainment tenants, which gobbled up tons of space during the mid-1990s, have slowed their real estate expansion. But the slowdown has been made up in many markets by rapidly growing high-technology companies.
In the area near Burbank Airport and eastern Pasadena, high-tech firms have moved into new and renovated low-rise office and research space. On the Westside, landlords and Internet firms are courting one another. In Orange County, the Spectrum, a giant office park in Irvine, has attracted droves of high-tech start-up companies.
“High-tech and biotech will have to pick up the reins [since] entertainment [leasing] is at a very slow pace,” said Jeffrey M. Woolf, a principal in Lee & Associates, a real estate services firm.
Next year, most markets should continue to experience more growth, but rents are expected to rise at a slower pace in the face of new construction and a slower growing regional economy.
