The first quarter vacancy rate in Hollywood rose to its highest level in a year, though it remained the lowest in all of Los Angeles County. The 11 percent vacancy rate was up from 9.1 percent in the prior quarter and from 9.5 percent a year earlier.
In total, the 2.25 million-square-foot office market gave back about 22,000 square feet, according to data from Jones Lang LaSalle Inc. (Data on the Hollywood submarket reflects a historical review and adjustment to the inventory by Jones Lang LaSalle.) Asking rents for Class A office space fell 1 cent from $2.98 in the fourth quarter last year, but were up 7 cents year over year.
John Tronson, a principal in Los Angeles at Avison Young Inc., said the office market in Hollywood is continuing a tepid recovery from recessionary lows.
“The rental rates are extremely strong, but there’s not a lot of volume,” he said. “The number of transactions happening is way off where it was in 2007.”
While leasing and sales have slowed, development is gaining momentum in Hollywood. A year after height restrictions were lifted on developments near transportation hubs, plans for the double skyscraper Millennium Hollywood project got its first green light from the city Planning Commission. New York development companies Millennium Partners and Argent Ventures plan to build the 55-story mixed-use development near the Metro Red Line’s Hollywood and Vine station.
Nicole Mihalka at Jones Lang LaSalle said she that thinks Hollywood developers were encouraged by news of the megaproject’s milestone.
“I think it’s positive for development overall in the area,” she said.
Tronson said at least one sale in the first quarter that his firm had a hand in hints at the potential for future development. LeFrak Organization, a New York real estate development firm known for its multifamily projects, added to a collection of properties it already owns in the area. The firm bought two storefronts totaling 6,500 square feet at 6430-34 Hollywood Blvd. for $4.5 million. The company already owns properties along nearby Wilcox Avenue.
– Bethany Firnhaber
Main Events
*New York development companies Millennium Partners and Argent Ventures got the green light for Millennium Hollywood, a double skyscraper and mixed-use development expected to include more than 1 million square feet of apartment, office and retail space. The 585-foot-tall towers will be built on a 4.5-acre lot one block from the Metro Red Line’s Hollywood and Vine station.
*L.A. real estate firm Shio LLC sold a free-standing retail building at 7630 W. Sunset Blvd. to San Diego real estate investment trust Romano Family Trust for $5.9 million. The FedEx Kinko’s print and ship center that occupies the 5,600-square-foot storefront on the Sunset Strip has two years remaining on its lease.
*New York real estate development and investment firm LeFrak Organization purchased the 6,500-square-foot retail storefront at 6430-34 Hollywood Blvd. from Hollywood landlord Shervin Rahim for $4.5 million.
*Marko and Laura S. Dimoski purchased a body shop at 811 N. Western Ave., built in 1963, from ProAmerica Bank for $4.4 million. They plan to open their own auto collision repair business in the 13,000-square-foot shop, formerly home to Western Collision Center.
*Las Vegas confectionary Sugar Factory signed a lease for 2,200 square feet at 6933 Hollywood Blvd., a retail space directly adjacent to the high-traffic TCL Chinese Theater (formerly Grauman’s). The candy store, which is expected to open in the fall, signed a 10-year lease valued at about $4.6 million.
