Brokers say several big Westside deals will likely close by year's end.

The Westside office market saw little in the way of major leasing or sales activity in the first quarter. But several brokers said several big deals are in the works and will likely be consummated by year's end.

Howard Sadowski, executive vice president at the West L.A. office of Julien J. Studley Inc., a commercial real estate brokerage, said the first three months of 1995 have been quiet for the Westside office market, which includes Beverly Hills, Brentwood, Century City, West Hollywood, Marina del Rey, Culver City, Santa Monica, West L.A. and Westwood.

"There haven't been any big deals over this past quarter, though there are now four or five in advanced negotiations," he said.

Michael Escalante, vice president at the downtown L.A. office of The Yarmouth Group, a real estate investment adviser based in New York City, said several Westside properties have been "quietly" put on the market for sale in recent months. He said most of the properties are office buildings, though he declined to give further details.

"We expect to see some deals - around five to 10 major transactions - take place in the next 12 to 18 months," he said.

Dick Ziman, CEO of Beverly Hills-based Arden Realty Group Inc., a diversified real estate investment company, also agreed that the Westside office market is very active at the moment, adding that his own firm is now in an "acquisition mode." However, he said any "decided trends" in the market will probably not come until sometime next year. "I'm bullish on it (the Westside office market), but honestly speaking, it's just not there yet," he said.

Small deals dominate

Big deals may be in the offing, but the Westside office market was largely driven by "smaller tenant" activity in the first quarter, according to Scott Chalmers at the Century City office of Newark, N.J.-based Premisys Real Estate Services Inc., a real estate management and leasing agent and a wholly owned subsidiary of The Prudential.

"We've had a lot of activity in the 25,000-(square)-foot-and-less range, but we haven't seen a lot of large deals in the first quarter," said Chalmers.

While they might not make news headlines, small tenants definitely had a positive impact on the Westside office market in the first quarter, according to commercial brokerage Grubb & Ellis Co.

The Westside office market posted an overall vacancy rate of 16 percent at the end of the first quarter, down from 16.2 percent at year-end 1994. Nearly all Westside submarkets saw their office vacancy rates drop in the first quarter, through those declines were all less than 1 percentage point.

The strongest Westside office submarkets continue to be Santa Monica, where the vacancy tale dropped from 8.2 percent at year-end 1994 to 7.9 percent at first-quarter's end, and Brentwood, where the vacancy rate dropped from 10.6 percent at year-end 1994 to 10 percent at first-quarter's end.

The Westside office submarkets with the highest vacancy rates were Beverly Hills, which posted a 19.4 percent first-quarter vacancy, and Westwood, where the first-quarter vacancy rate stood at 19.1 percent.

Entertainment action

Most industry sources agreed that entertainment- and media-related firms have been one of the strongest new tenant groups in the Westside office market in recent years. During the first quarter, most activity from this group came from smaller, growing entertainment and software companies, according to Vice President and General Manager Allan Seelig of Bailes & Associates, a tenant representation brokerage firm in Westwood.

However, two major Westside leases were also signed in the first quarter - by New Canaan, Conn.-based cable provider Century Cable and L.A.-based diversified entertainment company New World Entertainment. The New World deal was for 35,952 square feet of space at 3340 Ocean Park Blvd. in Santa Monica, while the Century Cable deal was for 27,453 square feet at 3000 Ocean Park Blvd., also in Santa Monica.

Several other major entertainment and media companies are continuing to look at Westside office space, according to industry sources. Media conglomerates Turner Broadcasting System of Atlanta and PolyGram NV of London are both interested in possibly moving to as-yet-unbuilt space at the Arboretum or the second phase of the Water Garden in Santa Monica, according to Seelig.

The Arboretum and second-phase site of the Water Garden are located on Colorado Avenue, on opposite sides of Cloverfield Boulevard.

Also reportedly interested in the Water Garden and Arboretum is DreamWorks SKG, the highly publicized entertainment venture launched by Steven Spielberg, Jeffrey Katzenberg and David Geffen last October. Industry sources said DreamWorks is also considering possible sites in Playa Vista, Burbank and Universal City.