Bargain Hunters Push Down Vacancy at Office Buildings.DOWNTOWN L.A. looks to be stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. a bit from the days of corporate mergers and downsizings, which left the market with a glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. space. The office vacancy rate improved to 17.9 percent in the fourth quarter, down from 19.2 percent for the previous three months, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Cushman & Wakefield Inc. Downtown telecom buildings -- class-B and C quality -- saw their combined vacancy rate plunge The term Plunge has multiple meanings:
Tenants that once looked to the Westside -- notably the law firm of Skadden, Arps, Slate, Meagher & Flom LLP LLP - Lower Layer Protocol -- are often opting to stay put because the gap in rents has grown so pronounced. New construction is also fueling optimism, if not attracting a flood of tenants. The question is whether more amenities and warm bodies will follow and bring down the vacancy rate to levels being enjoyed by landlords in stronger submarkets. The quarter's biggest deal was Tokyo-based Mitsui Fudosan Mitsui Fudosan Co., Ltd. (三井不動産株式会社 Co.'s sale of the 934,000-square-foot, 52-story Sanwa Bank Tower to Hines Interests for $215 million. Other notable transactions included Skadden Arps' 10-year lease extension at One California Plaza One California Plaza is part of a downtown Los Angeles commercial and cultural complex which also includes the MOCA (Los Angeles Museum of Contemporary Art), the Los Angeles Omni Hotel, Two California Plaza and the Watercourt[1]. , telecom giant MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. WorldCom's lease of an additional 83,000 square feet of office space at 800 S. Hope St., and Splitrock Communications' lease of 33,000 square feet of space in the 818 Building. Existing tenants in downtown's central business district continued to expand. PaineWebber leased 50,706 square feet in the 777 Tower, the Capital Group leased more than 25,000 square feet at 333 S. Hope St. and Morrison and & Foerster signed for an additional 25,783 square feet in the Gas Co. Tower. The fourth quarter saw a strong influx of cost-sensitive tenants moving into downtown, where space remains a bargain relative to the Westside and other prime areas. The average asking monthly rental rate for downtown office space is $1.67 per square foot, vs. $2.49 for the Westside and $1.81 for L.A. County as a whole, Cushman & Wakefield reported. Apparently drawn by those bargains, downtown office tenants leased 419,582 more square feet than they vacated-during the quarter. That accounted for the lion's share of the 461,638 square feet of total net absorption in downtown for all of 1999. Meanwhile, the industrial sector also tightened, as the vacancy rate fell from 3.6 percent in the third quarter to 2.7 percent at year end, its lowest rate in more than two years. The tight market is posing some challenges for brokers. "It's taking a little longer to get deals done due to the lack of vacancy and the unwillingness of landlords to give any concessions," said Bart Pucci, an industrial and investment broker at Grubb & Ellis Co. "The industrial market will tighten slightly in the near future, though it's hard to imagine it getting any tighter." One trend that may free up space is the move by apparel manufacturers out of downtown and into lower-cost areas, such as Asia and Mexico. For example, jeans maker Guess Inc. vacated 85,000 square feet of downtown industrial space during the fourth quarter. Despite such downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing , downtown's industrial market will undoubtedly get a boost once the $2.1 billion Alameda Corridor The Alameda Corridor is a 20 mile (32 km) freight rail "expressway"[1] owned by the Alameda Corridor Transportation Authority (AAR reporting marks ATAX project is completed in 2003. The dedicated rail corridor is expected to greatly increase the efficiency with which freight is transported between downtown industrial distribution centers and the seaports This is a list of the world's seaports: Atlantic Ocean
Other factors that could aid downtown industrial real estate are a stronger yen (which would increase Japanese demand for U.S. exports) and the continuing recovery of the Asian economy. Downtown Major Events: * Hines Interests bought 934,000 square feet of office space at the 52-story Sanwa Bank Tower from Tokyo-based Mitsui Fudosan Co. for $215 million. * Skadden, Arps, Slate, Meagher & Flom LLP signed 10-year lease extension for 123,000 square feet at One California Plaza. * Telecom giant MCI WorldCom leased an additional 83,000 square feet of office space at 800 S. Hope St. * Splitrock Communications leased 33,000 square feet of space in the 818 Building. * Telepacific Communications leased 25,700 square feet at 515 S. Flower St. |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion