Strong Fourth Quarter Demand Drives 2018 Gains
- The Greater Los Angeles Basin office market posted positive demand of 1,844,500 square feet, a high mark not seen since the fourth quarter of 2014. Vacancy dropped accordingly by 70 basis points 14.0%.
- After totaling more than two million square feet of deliveries in the past three quarters, construction deliveries of 60,500 square feet were minimal to close the year. Just over six million square feet remains under construction, of which 71% will deliver in 2019.
- Asking rental rate growth increased at a trailing four-quarter average of 1.1% to end at 3.17 per square foot (PSF) full service gross (FSG). This is a 4.5% gain over last year.
- Space grabs by technology and media companies pushed leasing activity to 25 million square feet for the year.
- The Los Angeles Basin unemployment rate fell from last quarter, ending at 4.1%. Total civilian job growth was 1.3% as the economy stabilizes at virtually full employment.
The Los Angeles County office market recorded 1,844,500 square feet of net absorption and 60,500 square feet of deliveries as the total vacancy rate fell to 14.4%. Much of the positive movement stemmed from the Downtown Los Angeles submarket totaling 413,600 square feet.
Rental rate growth continued to rise, increasing by $0.02 to $3.38 PSF FSG. Five of seven Los Angeles County submarkets saw rates increase. Construction activity remains concentrated in Downtown and West Los Angeles, accounting for 67% of construction in the county.
Los Angeles County non-farm unemployment in November 2018 recorded 4.6%, a 7% increase year-over-year. Over the past 12 months, Los Angeles County gained 60,400 non-farm jobs for an increase of 1.3%.