Downtown L.A. Office Vacancy Rate Drops

Downtown Los Angeles was among a handful of business districts in the country that showed strong leasing activity during the third quarter, as the office vacancy rate fell to 17.3%, from 19.6% a year ago.

The average vacancy rate for business districts nationwide generally remained flat, inching down to 14.8% from 15.5% a year ago, according to Cushman & Wakefield, a New York-based real estate services firm.

The uptick in Los Angeles leasing can be attributed to growing confidence in the economy among business owners who are starting to expand, said Joe Vargas, a senior managing director at Cushman. “There’s very good activity in the market,” he said.

In New York’s downtown Manhattan area, vacancy dipped slightly to 12.7% from 13% a year ago.

Downtown Denver saw its vacancy rate fall to 17.7%, from 19.4% a year ago.

Orange County reported a drop to 13.7% from 18.3%, much of which could be attributed to leases by Toshiba Corp., PacifiCare Health Systems Inc. and the county government.

Washington reported the lowest vacancy rate among the nation’s downtown markets at 7.5%, down slightly from 7.9% a year ago.

Average rents nationwide were nearly flat at $24.76 per square foot per year, compared with $24.83 in the same period of 2003.