With the vacancy rate at a low 8 percent, it was a quiet quarter along Wilshire Boulevard from downtown to Beverly Hills. Only one major lease was recorded, and only two buildings moved after several high-profile sales earlier in the year.
“Wilshire Corridor held its own in the last quarter. But nothing happened there of substance, probably because the Hollywood area, which has been sort of struggling over past years, is very hot right now,” said Richard Schnell, senior vice president of Colliers International.
Still, low vacancy rates in the Miracle Mile/Park Mile (9.9 percent) and Mid-Wilshire (6.4 percent) will eventually prove hard for investors to resist, brokers predict.
The steadily declining vacancy rate pushed average asking rates to $2.38 per square foot throughout the corridor, up 33 cents on the year. Landlords in the higher-quality Class-A buildings in Miracle Mile/Park Mile were asking a whopping $2.83 per square foot at year-end, up 40 cents from a year ago.
Meanwhile, small companies seeking affordable space typically are drawn to Wilshire Center’s abundant Class B inventory, but even that saw a 8 percent increase in asking rents to $1.36 from a year ago, though that was still the least expensive in the county.
“Continued growth from existing tenants and increasing rents will create deals,” says Chris Runyen, senior managing director of Charles Dunn Co. Inc. “As rents increase and occupancies increase, more investment sales will take place.”
Margot Carmichael Lester
MAIN EVENTS
2017 W. Olympic LLC purchased the medical office building at 2015 W. Olympic Blvd. for $5.35 million from the Korean American Presbyterian Church. The 12,930-square-foot property, built in 1953, is one of several medical offices, clinics and labs in the area. Nationally, medical office building investments increased 19 percent over the last year. Most medical building investments are too small for institutional investors and REITs, creating opportunity for 1031 exchangers.
The 2465 Fruitland Avenue LLC, an affiliate of Cohen Asset Management, purchased 2601 Wilshire Blvd., a two-building, 62,000-square-foot complex near MacArthur Park. The 1955-era property, sold by S & R; Wilshire LLC, is fully occupied by the L.A. County Department of Public Social Services in a long-term lease. Financial terms were not disclosed.
Developers Millenium Pacific Icon Group leased 9,300 square feet at 3250 Wilshire Blvd. in a five-year deal. The space will serve as the company’s headquarters. Financial terms were not reported. Other tenants include the Harriett Buhai Center for Family Law, the League of Women Voters and Westwood College.
Barker Pacific Group Inc. and the Praedium Group LLC bought the 38,594-square-foot office building at 8075 W. Third St. for $10.9 million. The 60-percent occupied building, sold by Office Building Crescent Heights Ltd., will be renovated in early 2007 to attract entertainment industry companies.
