Escalating rents and little available space made 2006 a good year for landlords on the Westside. The fourth quarter was no different.
Market-wide average asking rates for Class-A space jumped 20 cents on the quarter and 59 cents on the year to finish at $3.49 per square foot. The vacancy rate dipped to 6.4 percent from 8.8 percent over the year, according to Grubb & Ellis Co.
“With only six contiguous blocks of space 55,000 square feet or greater available, larger users will continue to face limited choices,” said Peter Best, managing director for Jones Lang LaSalle.
Some space will become available as Playa Vista progresses, but the current vacancy rate is at a low 6.5 percent in Culver City/Marina Del Rey and 8.1 percent in West L.A. And these markets have few properties with the kind of premier space Westside users crave.
Still, big names such as 20th Century Fox Television and Wachovia Corp. were able to grab space. And the William Morris Agency signed a lease for 150,000 square feet for a building that will be constructed in Beverly Hills.
The lack of space was reflected in average asking rates for Class A space that skyrocketed in Beverly Hills to $3.47 from $2.98 per square foot a year ago. And landlords in Santa Monica were asking an average of $4.83 per square foot, up from $3.50.
“Recently 100 Wilshire did $6 rents,” said Bob Safai, principal with Madison Partners. “We flirted with rates this high during the tech boom, but this time we could go right through them.”
Margot Carmichael Lester
MAIN EVENTS
In Century City, McDermott Will & Emery renewed for 75,000 square feet at Century Plaza Towers, 2049 Century Park East, for undisclosed terms.
Wachovia Corp. signed a 55,000-square-foot deal to establish a Southern California regional headquarters at the Northrop Grumman Plaza, 1800 and 1840 Century Park East, in a 10-year, $20.4-million deal.
Law firm Klee Tuchin Bogdanoff & Stern LLP relocated from Fox Plaza to the AIG SunAmerica Center, 1999 Avenue of the Stars. The seven-year deal for 20,200 square feet is worth $6.3-million.
In Beverly Hills, HKS Architects Inc. expanded to 10,000 square feet at 9441 W. Olympic Blvd. in a seven-year lease valued at around $5 million.
Real estate firm Lowe Enterprises Inc. renewed at 11777 San Vicente Blvd. in Beverly Hills. The 34,593-square-foot lease was valued at approximately $11 million.
In Westwood, Merrill Lynch renewed for 26,174 square feet in Center West office tower, 10877 Wilshire Blvd. Terms were not reported.
1101 Glendon Ave. LLC closed a $25 million, 60-year land lease for a 16,000-square-foot retail and office building at its namesake address.
The Cornerstone Plaza, a 164,061-square-foot Class-A office building at 1990 Bundy Blvd., was sold by an unidentified pension fund to South Bundy Office Co. LLC for $66 million.
