Los Angeles County’s office market continued to improve in the second quarter, posting decreased vacancy and higher asking rates, net absorption and construction activity.
L.A.’s vacancy rate fell to 11% in the quarter versus 13.6% a year ago. West L.A. recorded the biggest annual change, down 26% to 9.6%.
San Gabriel Valley posted the lowest vacancy rate in the county in the quarter at 6.6%, while South Bay recorded the highest at 19.2%.
Average asking lease rates in Los Angeles County increased 5 cents per square foot to $2.18, versus a year earlier. All L.A. markets had an increase in annual lease rates.
The biggest annual increase was in the downtown L.A. market where lease rates rose 8.9% to $2.33 per square foot. Asking lease rates in Ventura County increased 9.8% to $1.79 in the period.
Net absorption in Los Angeles County nearly tripled to 2 million square feet in the second quarter.
West Los Angeles recorded the most net absorption in the second quarter at 985,078 square feet. The Hollywood/Wilshire Corridor was next with 349,873 square feet. San Gabriel Valley was the only market in L.A. to post negative net absorption at 64,083 square feet.
There is 1.6 million square feet of office construction under way.
Industrial Market
L.A. County’s industrial market posted mixed trends in the second quarter, highlighted by decreased availability and vacancy, and increased average asking rates, gross activity and construction activity.
The industrial availability rate in Los Angeles County continued its steady decline from 7% in the first quarter 2004 to 5.3% in the second quarter this year.
Commerce had the biggest annual change, a 31.7% decrease to 5.3% in the second quarter. South Bay and San Gabriel Valley followed closely.
The Mid-Counties market had the highest availability rate in the second quarter at 7.2%. The Los Angeles market offered the lowest at 4.2%.
L.A. County’s vacancy rate fell to 1.9% in the second quarter, versus 2.3% the previous quarter. Average asking lease rates in the county climbed to 56 cents per square foot.
Gross activity rose 10.7% to 14.3 million square feet, compared to the first quarter. Gross activity is up 17.6% from a year earlier.
Construction activity increased to 8.4 million square feet from 7.2 million in the first quarter.
The Port of Long Beach remained strong during May while the Port of Los Angeles continued to see mixed results, according to the Los Angeles Economic Development Corp. The number of loaded import containers at Long Beach rose by 18.6% while Los Angeles saw a 13.4% decline.
The news was better on exports where Long Beach saw a 25.5% gain and Los Angeles recorded a 4.3% increase. Total container traffic at the two ports during May was up by 4.1%.
Data and analysis provided by CB Richard Ellis Group Inc.’s Information Management Department.
PLUS: CHART – Net Absorption; Vacancy Rates; Average Asking Lease Rates
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