Hollywood/Wilshire Corridor Demand Dips
- The average rent in Hollywood/Wilshire Corridor rose to $2.71 per square foot (PSF) full service gross (FSG), a $0.12 difference from last quarter.
- Vacancy moved up by 80 basis points from one quarter ago, recording 16.5%.
- Leasing activity fell from last quarter's Netflix-driven surge, recording 97,300 square feet.
- Investment activity for buildings greater than 25,000 square feet recorded $18.6 million over a single transaction.
- The construction pipeline consists of approximately 894,500 square feet of office product under construction and 191,600 square feet of proposed construction.
The Hollywood/Wilshire Corridor market began 2019 with negative absorption driving vacancy up by 80 basis points from the previous quarter. Some 894,000 square feet of office product is currently under construction, along with 191,600 square feet of additional proposed product scheduled to break ground in 2019. The majority of deliveries will take place in 2020 with the arrival of Hudson Pacific's EPIC and Harlow properties, as well as Kilroy's Academy project.
The Hollywood/Wilshire Corridor submarket will continue to see demand for space from entertainment, media and technology firms as pre-leased properties are delivered to the market, although the pipeline has dried up considerably from its height a year ago. As evidenced by recent groundbreakings set for delivery in 2020, developers still see room to run in the submarket and pre-leasing by major content firms has confirmed that outlook.