Major events in individual commercial and industrial real estate markets across the area in the fourth quarter.
When it comes to rent, cheap is in demand these days.
There’s no better proof than Wilshire Center’s Koreatown, a decent, centrally located address with some of the cheapest rents around.
Though the area gave back space like most other markets in the quarter, it was one of a handful that saw something else: a rise in the average asking rent.
It didn’t go up much, just two cents to $2.01, according to Grubb & Ellis Co. But for the neighborhood’s biggest landlord, Jamison Services Inc., it reflected strong demand.
“Our rates have always been competitive, so I don’t think people can go elsewhere and find anything better,” said Paul Kim, president of Jamison, and investment vehicle of Dr. David Lee and his partners.
Still, the not insubstantial 49,777 square feet of space that landed back on the market drove up the vacancy rate to 14.8 percent. That’s six-tenths of a percent greater than in the third quarter but nearly five points higher than a year ago.
Meanwhile, on the Miracle Mile end of the market near Beverly Hills, the rate fell 10 cents to $2.68 since the third quarter. That’s nearly 90 cents lower than a year ago as 113,806 square feet of space was plopped back on the market by firms that have either closed up, moved out or consolidated.
Frank Buckley, a broker at Madison Partners, said many tenants are jumping on the lower asking rents to expand, or extend and renew leases – and landlords are happy to oblige as long as it doesn’t involve extensive remodels or upgrades thrown in.
“It will lease as long as it’s vacant space that doesn’t require any capital investment,” Buckley said.
Office Market At a Glance
Inventory: 14.2 million square feet
Under Construction: 0 square feet
Class A Asking Rent: $2.58
Qualified Billing & Collections leased 19,400 square feet at 4601 Wilshire Blvd. The space was formerly occupied by Mass Mutual, which moved to 8383 Wilshire Blvd. The new lease was signed before Mass Mutual vacated the property – a sign the market is picking up, said Chris Runyen, senior managing director at Charles Dunn & Co., who represented owner Amir Development in the deal.
Scripps Networks, the cable production company that owns the Food Network and HGTV, has renewed its lease for 18,000 square feet of office space at the Museum Square building at 5757 Wilshire Blvd. Worldcolor Corp., a Montreal reprographic company, leased 7,000 square feet at the building. Terms with landlord J.H. Snyder Co. were not disclosed.
Apparition Films, a startup distributor of independent movies, leased 5,000 square feet on the 25th floor of 5760 Wilshire Blvd. Terms with landlord Equity Office Properties Trust were not disclosed.
Bloomberg News renewed a lease for 7,000 square feet at 6500 Wilshire Blvd. Buchwald Talent Agency leased 11,000 square feet in the same building. Terms with landlord TIAA-Cref were not disclosed.
BRE Properties broke ground on a 3.4-acre mixed-use development at the corner of Wilshire and La Brea boulevards. The six-story project will include 482 apartments, 28,000 square feet of retail space for stores and 12,000 square feet for restaurants. The site was formerly Columbia Saving Bank. Construction is scheduled for completion in 2012.
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