“Twenty years ago, the Westside was unquestionably a professional and business services market – law, banking, accounting, advertising. Today, it encompasses a creative sector that continues to grow and flourish,” said Connie Hwang, vice president of research for Avison Young.
The Westside seems to always be in demand.
Data from Jones Lang LaSalle Inc. show overall asking rates for the Westside reached $3.84 a square foot in the second quarter, a 14-cent year-over-year increase and a 4-cent increase from the first quarter. Vacancy levels dropped a bit to 16.8 percent in the second quarter from 17.4 percent in the opening period.
Santa Monica ($4.61 per square foot), Century City ($4.24) and Beverly Hills ($4.15) led the submarket in Class A average asking rates. And in terms of vacancy rates, Santa Monica and Beverly Hills have the lowest in Los Angeles County with 11.5 percent and 11.7 percent, respectively. Only the Eastern San Fernando Valley submarket, at 10.3 percent, is tighter.
“Specific tenants need to be in Beverly Hills and Santa Monica, so landlords can push rental rates a little and tenants can still conduct business,” said Anthony Gatti, managing director at Jones Lang LaSalle. “Everybody threatens to move, but they’re not moving, and these landlords are starting to be more cognizant of the comps associated with moving versus staying put.”
One such deal was made by Netflix Inc., which renewed and expanded to 32,300 square feet at 335 N. Maple Drive in Beverly Hills. Terms were not disclosed.
But not all Westside markets are thriving. Vacancy remained high in Brentwood (25.7 percent) and Marina del Rey-Culver City (28.4 percent), keeping average asking rates low. Landlords of Brentwood’s Class A space were asking $3.22 per square foot on average in the second quarter; in Culver City and Marina del Rey, asking rents were the lowest on the Westside at $2.86.
But available space at affordable prices paid off for Culver City’s Blackwelder property, an adaptive reuse of a former cabinet and furniture manufacturing facility at 3101-3242 La Cienega Blvd. Two leases were inked there in the second quarter. Modeling agency Photogenics Media took 3,200 square feet in two buildings in a deal valued at $1.1 million. Philadelphia events group Sparks Marketing Group established a West Coast office with a three-year lease for 2,600 square feet in a deal valued at $526,000.
The Westside’s overall fundamentals appealed to investors, who were active in the second quarter.