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RENT GROWTH FLATTENS IN THE CENTRAL LOS ANGELES OFFICE MARKET
Average asking rental rates in the Central Los Angeles Office Market were flat over the previous quarter, but are still up 8.8% from one year ago. As of Q2 2008, the average rate was $32.13 PSF (FSG) per year.
The vacancy rate at quarter-end was 12.8%, up 0.2% from last quarter, but down slightly from 12.9% a year ago. The vacancy rate in Downtown declined during Q2 2008, ending the quarter at 14.4%.
Only 215,000 SF is currently under-construction in the area, and demand is expected to be moderate, bolstered by tenants unable to find space that meets their needs at affordable rates in adjacent markets. While rental rates have increased steadily over the last few years, the Central Los Angeles office market still remains a bargain compared against rates in adjacent areas (in particular West Los Angeles).
Vacancy rates are expected to tighten at a moderate pace over the next one to two years, although a significant amount of quarter-by-quarter fluctuation can be expected.
Contact Michael Gold at 213.532.3247 for more information.
  OFFCLA08Q2.pdf
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