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ACTIVITY SLOWING ON THE WESTSIDE; YET LANDLORDS
PUSH ASKING RENTS UP
Continued slowing of the economy and record-high rental rates caused demand
for office space in West Los Angeles to slow in Q1 2008. Net absorption
was slightly positive at 8,100 SF, while vacancy climbed 0.1% to end at
8.6%. Average asking rates continued to climb, but by a much slower
pace than witnessed in 2007.
With 1.3 million square feet of new office space under-construction in
the market and the economy likely to continue to slow and perhaps enter
a recession, it appears that vacancy rates will continue to climb slightly,
perhaps reaching 10% by year-end 2008. Although this should reflect
a shift in the market from one that favors landlords to one more balanced
between tenant and landlord needs, the reality in the market-place is different.
Landlords continue to hold firm on asking rents, and in some cases
are still raising rents. We expect this trend to soften in certain
submarkets. While Orange County is in the midst of the sub-prime fall-out,
the market shift in Los Angeles has been less dramatic.
Contact Michael Gold at 213.532.3247 for more information.
  OFFWLA08Q1.pdf
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