There were few major transactions in the third quarter along the Wilshire Corridor, as most investors and tenants opted to do nothing amid unrest in the financial markets.
The corridor, which stretches from downtown to Beverly Hills along Wilshire Boulevard, softened slightly over the quarter as the vacancy rate edged up two-tenths of a point to 9.8 percent and Class A asking rents fell two cents to $2.70, according to Grubb & Ellis Co.
“It’s a market trying to hold on to and attract tenants in tough economic times,” said J.C. Casillas, Grubb & Ellis client services manager.
Wilshire Center, which includes Koreatown, saw vacancies hit double digits at 10 percent for the first time in four years, up six-tenths of a point since the third quarter and nearly three points since a year ago.
However, asking rents were unchanged from the prior quarter at $1.87 per square foot a phenomenon attributed to the dominance of landlord Jamison Properties, the investment vehicle of Dr. David Lee, one of the largest commercial landlords in Los Angeles County.
“Wilshire Center has been a steady market for many years because Jamison Properties alone has determined what fair rates should be,” said Chris Runyen, senior managing director of GVA Charles Dunn Co.
Further west in the Park Mile-Miracle Mile area, the vacancy rate actually fell over the last three months by three-tenths of a point to 9.5 percent. Class A buildings dropped asking rates eight cents to $3.45 per square foot, though that was still nine cents higher than the beginning of the year.
Office Market At a Glance
Inventory: 14.1 million square feet
Under Construction: 0
Class A Asking Rents: $2.86
MAIN EVENTS
– Gtam Special Realty Opco LLC sold office properties at 5800 Wilshire Blvd. and 725 S. Curson Ave. to the Charles and Michelle Hazan Corp. for $6.2 million. The Wilshire building is 11,400 square feet; the Curson building is 4,526 square feet.
– The commercial component of the massive Solair Wilshire project at the corner of Wilshire and Western boulevards in Koreatown is well under way. The property will be home to 40,000 square feet of commercial space when it is due to come on line later this year. No tenants have been announced. The development is a joint venture between Koar Wilshire Western LLC and the Los Angeles County Metropolitan Transportation Authority.
– A 168,000-square-foot office building, 5055 Wilshire Blvd., received Silver certification in the new LEED for Existing Buildings: Operations & Maintenance program administered by the U.S. Green Building Council. It is the first commercial building in the country to achieve the standard.
– Variety relocated its headquarters from Wilshire Courtyard, 5700 Wilshire Blvd., to 55,000 square feet of space at the 31-story 5900 Wilshire Blvd. tower. The deal included a large, lighted “Variety” sign on the building. Variety’s parent company, Reed Business Information, will also operate its Marketcast and Home Entertainment Group properties from the space. Terms of the deal were not disclosed.
– CalNational Bank announced it will vacate three floors totaling almost 43,000 square feet at 5900 Wilshire Blvd.
