Two trends that gained steam in the latter half of 2021 are showing the potential to become the norm this year: modular housing construction and spec office designs. Both help developers and owners save time and money.

Real Estate Quarterly Report: Q4 2021

Time, Cost Savings Increase Modular Construction Interest 
Fast Turn Around Drives Spec Space Demand 

L.A. County Real Estate Submarket Data Summary

DOWNTOWN

Downtown’s fourth quarter office vacancy rate rose to 21.2%, up from 19.9% the previous quarter and 18.3% the previous year. There was no office product under construction during the quarter and negative 160,991 square feet of space was absorbed in the market. Asking rents were steady quarter over quarter at $3.83 a square foot but down 2 cents from the previous year.

Main Events

A 199,860-square-foot historic building in downtown known as the May Co. Garage building has received a $10.7 million loan to refinance.

Keno Properties sold a portfolio of three industrial buildings in downtown for $11.3 million.

Clothing and accessory retailer Johnny Was signed a lease for roughly 31,000 square feet at an office property at 712 S. Olive St.

East End Capital purchased a warehouse space at 2233 Jesse St. for $43 million with plans to convert the cold-storage property into a production studio. It is in Boyle Heights near the border of downtown.

HOLLYWOOD

Hollywood’s office vacancy rate fell to 29.2%, down from 30.9% the previous quarter and up from 19.3% the previous year. Rents increased to $5.21 a square foot, up 3 cents over the previous quarter and the previous year. Net absorption was 331,151 square feet with no office properties under construction during the quarter.

Main Events

A joint venture of funds managed by Trinity Fund Advisors and funds managed by Oaktree Capital Management purchased a leasehold interest in the iconic W Hollywood hotel for $197 million.

Morguard Corp. purchased Lumina Hollywood, a 299-unit multifamily building at 1522 Gordon St., for $79.4 million.

Onni Group of Cos. purchased a historic building called Romaine and Sycamore in Hollywood for $40 million, according to Commercial Observer.

Investor Deepak Mehta and Xenon Investment Corp. purchased the 33-unit Hollywood Apartments at 7044 Lanewood Ave. for $7.5 million.

WESTSIDE

The Westside office vacancy rate decreased to 18.5%, down from 18.6% the previous quarter but up from 12.6% the previous year. Marina del Rey had the highest vacancy rate at 28.4%, West Hollywood had the lowest at 11.8%. Asking rates for Class A space on the Westside was $5.62 a square foot, up 3 cents from the previous quarter but down 1 cent from the previous year. There was 2 million square feet of office space under construction, including 655,632 million square feet in Culver City and 1.3 million in West L.A. There was 113,371 square feet of net absorption on the Westside during the quarter.

Main Events

An unnamed buyer purchased a property at 360 N. Rodeo Drive from the Harkham family for $200 million.

Riot Games Inc. signed a 10-year lease for 200,000 square feet of space at Hines, Philena Properties and USAA Real Estate’s mixed-use West Edge project.

A joint venture between Chicago-based John Buck Co. and El Segundo-based 3MR Capital received $34.1 million in financing for the $210 million mixed-use development of 11111 Jefferson in Culver City.

Armata Pharmaceuticals Inc. signed a lease for 56,300 square feet, in a new headquarters building at 5005 McConnell Ave. in Del Rey.

SANTA CLARITA VALLEY

Santa Clarita Valley’s office vacancy rose 22.1%, up from 21.2% the previous quarter and 17.8% the previous year. Net absorption was negative 22,693 square feet, and there was no office product under construction. Asking rents were flat quarter over quarter but fell 5 cents year over year to $2.87 a square foot.

Main Events

Covington Group Inc. purchased the Saugus Station Industrial Center in Santa Clarita, which totals roughly 1 million square feet, for an undisclosed price. The deal included a separate 24-acre land site.

A single-story 7,380-square-foot Class A office building at 21080 Centre Pointe Parkway in Santa Clarita sold for $2.6 million.

Blackstone Group Inc. purchased the 84-unit Crescent Valley Mobile Home Park in Newhall for $15.8 million.

SAN FERNANDO VALLEY

The San Fernando Valley’s office vacancy rate rose to 18.9%, up from 18.1% the previous quarter and 16.4% the previous year. Rents held steady quarter over quarter but decreased 1 cent year over year at $2.94 a square foot. Net absorption was negative 239,595 square feet, and 306,673 square feet was under construction.

Main Events

Culver City-based Hackman Capital Partners and New York-based Square Mile Capital Management entered into an agreement to buy the 55-acre CBS Studio Center for $1.85 billion from ViacomCBS Inc.

A freestanding industrial building at 758 Arroyo St. in San Fernando sold for $1.7 million.

Beverly Hills-based Dunleer sold a 38-unit multitenant industrial park at 7361 Ethel Ave. in North Hollywood for $10.4 million.

A private investor purchased a 1.5-acre shopping center in Canoga Park for $9 million with plans to redevelop.

TRI-CITIES

Fourth quarter office vacancies increased in the Tri-Cities submarket of Burbank, Glendale and Pasadena to 15.5%, up from 15% the previous quarter and 13.6% the previous year. Negative 19,785 square feet was absorbed in the quarter while 1.3 million square feet was under construction. Rents held steady quarter over quarter but rose 9 cents over the previous year to $3.67 a square foot.

 

Main Events

Brookfield Real Estate Investment Trust Inc. purchased the 14.7-acre DreamWorks campus in Glendale for $327 million.

Jonathan Rose Cos. purchased a 313-unit affordable housing complex known as the Kings Villages Apartments in Pasadena for $223 million.

Brentwood-based Pacshore Partners purchased a 152,834-square-foot office building in the Burbank Media District for $90.5 million from Granite Properties.

Waterford Property Co. and California Statewide Communities Development Authority purchased Westgate Apartments, a 480-unit complex in Pasadena, for $280 million with plans to convert it to middle-income housing.

Waterford Property Co. and the California Statewide Communities Development Authority acquired Theo, a multifamily property in Pasadena with 105 units, for $67 million from Summerhill Apartment Communities.

Century City-based Cityview and New York-based Clarion Partners acquired a 276-unit multifamily property in Burbank known as Empire Landing for $161 million.

WILSHIRE CORRIDOR

Wilshire Corridor’s fourth quarter office vacancy rate rose 29.4%, up from 27.4% the previous quarter and 23.3% the previous year. Negative 182,441 square feet was absorbed into the market, and no new office product was under construction. Asking rents fell to $2.56 a square foot, down 3 cents over the previous quarter and 36 cents over the previous year. Asking rents in Miracle Mile were much higher at $4.41 a square foot.

Main Events

Fairfield purchased 103-unit multifamily property Broadstone Candara at Hancock Park for $60.1 million.

Mosser Capital purchased Wilshire Royale, a 193-unit multifamily building with retail in Westlake, from MWest Holdings for $45.5 million.

TDI Properties Inc. purchased a portfolio of three multifamily properties known as the Elevate LA Portfolio, which had properties in Central L.A., Koreatown and Pico-Union, from a Colorado-based family for an undisclosed sum.

SOUTH BAY

South Bay’s industrial market vacancy decreased to 0.7%, down from 1% the previous quarter and 2.2% the previous year. Roughly 1.2 million square feet was under construction while 4 million square feet sold or leased during the quarter. Rents rose to $1.27 a square foot, up 13 cents over the previous quarter and 24 cents over the previous year.

Main Events

CenterPoint Properties purchased an industrial property at 2550 Orange Ave. in Signal Hill from Signal Hill Petroleum Inc. with plans to redevelop the 9-acre property into a 100,147-square-foot warehouse.

Onni Group of Cos. purchased a 6.2-acre property at 6500 E. Pacific Coast Highway in Long Beach pegged for redevelopment into a multifamily property for $68 million.

The Los Angeles Chargers announced plans to build a new headquarters and practice facility on a 14-acre site owned by Continental Development Corp. and Mar Ventures Inc. in El Segundo at a cost of more than $100 million.

A portfolio of five newly built properties occupied by Starbucks Corp. stores sold in separate transactions in La Palma, Redondo Beach, El Cajon, Rosamond and Modesto for a combined $21.1 million.

Brentwood-based Rexford Industrial Realty Inc. purchased a property at 21515 Western Ave. in Torrance for $19 million with plans to redevelop the site.

SAN GABRIEL VALLEY

The San Gabriel Valley’s fourth quarter industrial vacancy rate decreased to 1.2% from 1.4% the previous quarter and 2.6% the previous year. Asking rents were $1.03 a square foot, up 9 cents over the previous quarter and 20 cents the previous year. Roughly 1.9 million square feet was sold or leased during the quarter and 1.4 million square feet was under construction.

Main Events

Century City-based Standard Communities, the housing division of Standard Cos., and West Hollywood-based Faring Property Group purchased a 349-unit apartment complex in Pomona, known as Monterey Station, from Clear Capital for $130 million.

Duke Realty purchased a 3.2-acre distribution facility at 468 S. Humane Way in Pomona, which is 63,265 square feet.

CenterPoint Properties purchased a portfolio of three industrial assets at 4061 Via Oro Ave. in Long Beach, 4250 E. Greystone Drive in Ontario and 1300 Palomares Ave. in La Verne for an undisclosed sum.

Beverly Hills-based Dunleer purchased a 64,109-square-foot industrial property in Temple City from rake manufacturer McGuire Industries Inc. for $10.6 million.

Waterford Property Co. and California Statewide Communities Development Authority bought a 472-unit apartment community in Pomona for $149.4 million with plans to turn it into middle income housing.