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LEASING ACTIVITY REMAINS STRONG IN THE
SOUTH BAY OFFICE MARKET, RENTAL RATE GROWTH SLOWS
The slowing economy caused the vacancy rate in the South Bay office market
to increase to 14.8% in Q1 2008 effectively ending four quarters in a row
of declining vacancy rates. While this is higher than the 8% to 11% range
considered “healthy”, it is still a vast improvement over vacancy rates
that touched 20% just three years ago. Despite the increase in the vacancy
rate, the market experienced a seventh consecutive quarter of increased
rental rates although the growth in rental rates has slowed from last quarter.
Asking rental rates were still up 7.5% over a year ago.
Construction activity is ongoing, but thus far the amount is relatively
small. With an increase in vacancy and a slowing in rental rate growth
this quarter, the market is projected to slow with the rest of the economy
over the next 12 months.
Contact Michael Soto at 213.532.3220 for more information.
  OFFSB08Q1.pdf
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