WEST LOS ANGELES OFFICE MARKET GAINS MOMENTUM
IN SECOND QUARTER, MID-YEAR REPORT REVEALS
LOS ANGELES, July 20 /PRNewswire/ -- The West Los Angeles office market recorded a strong second quarter with healthy absorption and vacancies down from the previous quarter, according to a mid-year report released today by Grubb & Ellis Commercial Real Estate Services.
The vacancy rate for the West Los Angeles office market stood at 18.4 percent as the second quarter ended, down from the previous quarter's 19.1 percent and up slightly from the 18.0 percent recorded for the same period a year ago.
"We're seeing a consistent pattern of strengthening in the Westside marketplace," said Rosey Miller, senior marketing consultant with Grubb & Ellis' West Los Angeles office. "Rates have stabilized, vacancy rates have begun to gradually decline and tenants are making moves to lock in on today's rates."
Net absorption for the second quarter totaled 305,838 square feet, up from the 185,458 square feet posted the previous quarter as well as the 188,779 square feet posted for the same period a year ago.
At mid-year, the West Los Angeles office market had absorbed 491,296-square-feet of office space, up sharply from 1991's mid-year total of -98,333 square feet.
"We're predicting total net absorption for 1992 of 1.2 million to 1.4 million square feet for West Los Angeles," said Miller. "That's a far cry from 1991's year-end total of 181,000 square feet."
Leading the West Los Angeles office market in net absorption for the second quarter were Santa Monica with 173,047 square feet and West Los Angeles with 172,178 square feet. Also recording positive absorption for the quarter were Century City with 60,595 square feet, Marina/Culver City with 45,325 square feet and Westwood with 39,180 square feet.
Vacancies in the West Los Angeles office market ranged from a low of 14.0 percent in Century City to a high of 26.5 percent in Beverly Hills. Vacancies in the remaining submarkets for the second quarter were Brentwood, 15.2 percent; Hollywood/West Hollywood, 18.9 percent; Marina/Culver City, 21.3 percent; Miracle/Park Mile, 21.6 percent; and Santa Monica, 16.8 percent.
"Rental rates should begin trending upward in the fourth quarter of this year or the first quarter of 1993," said Miller. "The key for tenants who wish to lock in at today's rates is to start their search for new space now. The completed transaction can take from six months to two years depending on the size of the tenant."
The amount of new office space under construction continued to fall, with no new construction begun in West Los Angeles for the fourth quarter in a row.
There was 497,711-square-feet of office space under construction in West Los Angeles as the second quarter ended, down sharply from the 2 million square feet under construction a year ago.
"The lack of new office construction is helping to bring the office space supply/demand equation back into balance in West Los Angeles, however, it is also tightening the market for new, first generation space," said Miller. "As the vacancy rate continues to fall, tenants looking for new space are going to find fewer choices at higher rental rates."
Submarkets with office space under construction included West Los Angeles, 193,000 square feet; Miracle Park Mile, 182,000 square feet; Santa Monica, 95,000 square feet and Marina/Culver City, 23,711 square feet.
/CONTACT: Sharon Abar of Grubb & Ellis Commercial Real Estate Services, 714-937-0881/ CO: Grubb & Ellis Commercial Real Estate Services ST: California IN: SU: AL-JL -- LA021 -- 0855 07/20/92 15:26 EDT