Greater L.A. Demand Decreases At End Of Year
- The Greater Los Angeles Basin office market posted positive demand of 2.2 million square feet for the year. Construction deliveries of 3.2 million square feet have caused vacancy to jump 30 basis points to 14.2 % from the start of the year.
- Asking rental rate growth recorded 2.9% year-over-year to end at $3.26 per square foot (PSF) full service gross (FSG).
- Activity from entertainment and technology tenants drove overall leasing activity of 4.8 million SF for the quarter, a low since the second quarter of 2014.
- There were 823,300 square feet of construction deliveries, leaving 8.8 million SF currently under construction.
- The Los Angeles Basin unemployment rate fell from last quarter, ending at 3.9%. Total civilian job growth was essentially flat as the economy maintained full employment.
Los Angeles County Office Market:
The Los Angeles County office market recorded 316,200 square feet of net absorption. Construction deliveries of 823,300 square feet led to a rising vacancy rate of 14.6%. West Los Angeles accounted for 65% of the total demand for the quarter. Leasing activity, which dropped approximately 500,000 square feet from last quarter, recorded 3.3 million square feet. Receding activity from co-working firms and less activity overall led to this slide.
The Los Angeles Basin office market is comprised of 314.2 million square feet of multi-tenant office space in buildings 25,000 square feet or larger. It ranks as the third largest office market in the nation, following New York City and the Greater Washington D.C. area.