Office Market
The Los Angeles County office market had a positive first quarter. Highlights included lower vacancy and improved asking rates, net absorption and construction.
The vacancy rate in Los Angeles County continued its steady decline to 12.6%, down from 14.2% a year earlier. The San Gabriel Valley saw the biggest annual change, down from 8.1% in 2004 to 6.1%.
L.A. County’s lowest vacancy rate in the period was in the San Gabriel Valley, with South Bay reporting the highest at 20.5%.
Average asking lease rates in Los Angeles County increased 4 cents to $2.16 per square foot in the first quarter, versus a year earlier. Downtown L.A. had the biggest annual increase, up 14.8% to $2.26 per square foot.
L.A.’s net absorption remained positive in the first quarter at 730,908 square feet. West L.A. posted the highest net absorption at 291,538 square feet. Downtown L.A. had 208,831 square feet of absorption in the period, with the San Fernando Valley at 178,732 square feet.
Negative net absorption was seen in two areas: the Hollywood/Wilshire Corridor and South Bay.
There was 1.3 million square feet of office space under construction in the period.
Industrial Market
L.A. County’s industrial market was mixed in the first quarter. Highlights included decreased availability and construction, and higher vacancy, average asking rates and gross activity.
The availability rate in L.A.’s industrial market fell to 5.8% in the quarter versus 7% a year earlier. South Bay had the highest annual change, falling 25% to 5.8%. The Mid-Counties market had the top industrial availability rate in the county at 7.4%.
Vacancy rose to 2.3% in the period, up slightly from 2.2% the previous two quarters.
Activity started off strong in 2005, with 12.9 million square feet of gross sales and leasing activity,a 3.3% increase from last year. The biggest quarterly gain was in Commerce, which saw 2.2 million square feet of activity in the period, nearly three times the amount in the fourth quarter.
Average asking lease rates conintued to climb in L.A. in the first quarter to 54 cents per square foot. Construction activity slipped to 7.2 million square feet from 9.7 million square feet in the fourth quarter.
According to the Los Angeles Economic Development Corp., the number of containers handled at the Los Angeles/Long Beach port complex in January was up by 10.7% to 1.1 million TEUs (twenty-foot equivalent units), versus a year earlier. It was the 11th consecutive month of 1 million-plus unit activity at the port complex.
Despite being a short month, container counts at the local ports during February were quite strong.
Data and analysis provided by CB Richard Ellis Group Inc.’s Information Management Department.
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