Office Market
The Los Angeles County office market continued to post positive results in the fourth quarter, including decreased vacancy, increased asking rates and higher net absorption.
The vacancy rate in L.A. County was 10.7% in the fourth quarter, down from 13.1% a year earlier.
West L.A. had the biggest decline, down to 8.9% in the quarter from 12.6% a year ago.
The San Gabriel Valley had the lowest vacancy rate in L.A. County at 5.9% at the end of the period, with the South Bay recording the highest at 16.5%.
Average asking lease rates in L.A. County increased 12 cents per square foot to $2.27 in the quarter, versus a year earlier.
The biggest annual increase was in the downtown L.A. market, which rose from $2.11 to $2.42 per square foot.
South Bay was the only market to experience an annual decline in asking rates, decreasing 1.6% to $1.83 per square foot during the quarter.
Net absorption in L.A. County continued to be positive in the fourth quarter with 1.9 million square feet of net absorption.
There was 4.7 million square feet of absorption in 2005.
Net absorption in the fourth quarter was highest in the Tri-Cities market at 654,706 square feet.
The Hollywood Wilshire corridor and downtown L.A. markets each saw negative net absorption in the fourth quarter at 77,544 and 69,730 square feet, respectively.
Construction activity reached its lowest level for the year in the fourth quarter with 1.1 million square feet under construction.
Industrial Market
The L.A. County industrial market recorded mixed results in the fourth quarter, with decreased availability, lower vacancy, higher average asking rates, a rise in gross activity and lower construction activity.
The availability rate in L.A. County continued its steady decline, down from 7% in the first quarter of 2004 to 4.8% in the fourth quarter.
The Commerce submarket saw the biggest annual change, a 39.2% decrease to 4.6% in the quarter.
Vacancy in L.A. County decreased for the third consecutive quarter to 1.6%, compared to 2.2% in the first quarter last year.
Average asking lease rates in the county increased for the fourth consecutive quarter to 59 cents per square foot, compared to 53 cents a year earlier.
Gross activity rebounded from a dip in the third quarter to 13.2 million square feet. That was 9.3% higher than a year earlier.
The Commerce submarket saw the biggest annual increase in activity, nearly doubling to 1.4 million square feet in the quarter, versus a year earlier.
The Los Angeles submarket recorded the largest decrease in activity in the past year, down 23.1% to 861,207 square feet in the quarter.
Overall construction activity decreased to 5.8 million square feet from 9.7 million square feet a year earlier.
Data and analysis provided by CB Richard Ellis Group Inc.’s research department.
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