After getting pummeled during the first half of the year, the Hollywood-West Hollywood office market area finished the third quarter with slight gains across the board.

Consider the net absorption rate: After spending the last five quarters in the red, the Hollywood-West Hollywood market ended the quarter positive at 116,534 square feet, according to Grubb & Ellis Co.

What’s driving the market?

Some companies successfully riding out the downturn are leaving the world of leases and landlords behind to take advantage of lowered sale prices, purchasing property in Hollywood while investors and developers are sidelined due to the credit market.

“Owner-users get their money to buy buildings from three places: their own investments, equity in their houses and other assets, and cash flow from their businesses,” said Martin McDermott, vice president at Grubb & Ellis. “All three of these things started to stabilize in June, so users started to come back and look for property.”

Hollywood is an attractive option compared to other markets, McDermott said, because the amenities and incentives that arrived with the boom – new restaurants and business services, spruced-up neighborhoods and enterprise zone tax credits – are still there and still enticing.

“Overall, Hollywood has become a great area for businesses to locate,” he added. “And it’s a value play.”

After a sharp decline in lease rates during the second quarter, classes A and B asking rents saw minor increases, but are still cheaper than much of the Westside.

Office Market At a Glance

Inventory: 4 million square feet

Under Construction: 400,000 square feet

Class A Asking Rents: $3.67

MAIN EVENTS

• Postproduction and duplication services firm Digital Post Services bought a 14,270-square-foot property at 712 Seward St. in Hollywood for $4.25 million from Seward Property Investments LLC. The company is vacating its facility at 2044 Cotner Ave.

• Santa Monica-based non-profit Step Up on Second purchased a former motel at 1057 Vine St. for approximately $3 million. The group will use the property to expand its homeless services into the Hollywood area.

• Crew Creative, an online and print marketing firm, leased a West Hollywood office building that will serve as the company’s new corporate office. Terms of the deal for the three-story, 23,065-square-foot building at 7966 Beverly Blvd. were not disclosed.

• Private investors Steven and Stephanie T. Ngu purchased a retail building for $1.9 million from Western LLC. The 7,500-square-foot building is at 5060 Santa Monica Blvd.

• Madame Tussauds Hollywood wax museum opened at the Hollywood Orange Building, at the corner of Hollywood Boulevard and Orange Drive. The three-story building was designed by L.A. architects John Ash and Michael Rotondi for developers Larry Worchell and Steve Ullman.

• 6021 Carlton Way LLC purchased the Carlton Way Apartments in Hollywood at 6021-6029 Carlton Way from William Holdings Inc. The buyer paid just over $4 million for the 30-unit complex, which includes a mix of one-bedroom, two-bedroom and three-bedroom units.