Office Market
The Los Angeles County office market recorded gains in the first quarter, versus a year earlier, with vacancy down from 12.4% to 10.1%, asking rates up from $2.17 to $2.26 per square foot and net absorption rising from 860,000 to 1.1 million square feet.
The West Los Angeles market had the biggest annual vacancy rate change, falling 36.1% to 7.6% in the first quarter.
The San Gabriel Valley had the lowest vacancy rate in Los Angeles County at the end of the quarter at 5.9%. The South Bay market had the highest vacancy rate at 15.9%.
Average asking lease rates in Los Angeles County increased 9 cents to $2.26 per square foot. All L.A. markets posted lease gains in the quarter.
The largest lease rate increase was in the Hollywood/Wilshire corridor, with rates up 8.8% to $1.88 per square foot. South Bay had the smallest increase at 0.8% to $1.85 per square foot.
Net absorption in L.A. County continued to be positive in the first quarter.
First quarter net absorption was greatest in the West Los Angeles market with 562,125 square feet.
Three L.A. markets had negative net absorption in the first quarter: Hollywood/Wilshire with negative 93,445 square feet, downtown L.A. with minus 15,541 square feet and San Gabriel Valley with negative 10,710 square feet.
Construction activity declined to 1 million square feet in the first quarter, down from 1.3 million square feet a year ago.
Industrial Market
The L.A. County industrial market grew tighter during the past year, resulting in solid first quarter results, versus a year earlier: vacancy decreased from 2.3% to 1.6%, availability fell from 5.8% to 4.9% and average asking rates increased from 54 cents to 63 cents per square foot.
Vacancy in L.A. fell to 1.6% from 2.3% in the first quarter a year earlier. The Los Angeles market is the tightest with 0.42% vacancy, followed by the Commerce market with 1.13% vacancy. The Mid-Counties market has the highest industrial vacancy in the county at 2.2%.
Average asking lease rates in L.A. increased for the fifth consecutive quarter to 63 cents per square foot. The county’s highest average lease rate was in Western San Fernando Valley at 75 cents per square foot. The lowest rates are in the Mid-Counties region at 52 cents per square foot.
The Mid-Counties submarket had the biggest annual change in availability, down 34.6% to 4.9%. The greater San Fernando Valley market had the highest availability rate in L.A. County at 5.7%, while the Commerce market recorded the lowest at 3.8%.
Gross activity decreased annually to 11.1 million square feet of gross sales and leasing activity,a 14% annual decrease from 12.9 million square feet a year ago.
The San Gabriel Valley recorded a 60% annual increase in activity to 2.9 million square feet in the first quarter, versus a year ago. Vernon had a 71.6% decrease in annual activity to 318,890 square feet.
Construction activity declined to 4.5 million square feet under way in the first quarter, versus 7.2 million square feet a year ago.
Data and analysis provided by CB Richard Ellis Group Inc.’s research department.
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