Major events in Los Angeles County commercial and industrial submarkets in the third quarter.
The Wilshire Corridor’s long downward spiral slightly slowed in the third quarter.
Though the market gave up nearly 120,000 square feet of commercial office space, according to Grubb & Ellis Co., but that was significantly less than the 200,000-plus square feet than the quarter before. The vacany rate increased almost a point to 18.2 percent, but that too was far less than the second quarter’s jump jump of more than three points.
“In general, tenants are hesitant to move because they don’t want to spend the capital. And aggressive outside landlords are causing incumbent landlords to offer deals to keep their tenants in place,” said James Malone, a senior vice president at Jones Lang LaSalle, which does business in the commercial district stretching from downtown Los Angeles to Beverly Hills.
Most of the leasing and renewal activity seems to have taken place along the Miracle Mile, which absorbed nearly 55,000 square feet of office space, while Wilshire Center – including Koreatown – gave up nearly 175,000.
Brian Denton, an associate vice president with Grubb & Ellis, believes the trouble in Wilshire Center may be due in part to the area’s mix of tenants, which have traditionally included both small businesses and international banks. Compared with the larger enterprises on the Miracle Mile, he said Wilshire Center’s businesses “have had more difficulty weathering the storm.”
Also, some landlords on the Miracle Mile have benefitted from the arrival of new tenants priced out of the more expensive markets in Santa Monica and Beverly Hills.
Office Market At a Glance
Inventory: 14.2 million square feet
Under Construction: 0
Class A Asking Rents: $2.51
- Break Media, an Internet marketing company, has taken advantage of the faltering commercial real estate market to move its headquarters from 8750 Wilshire Blvd. in Beverly Hills to Museum Square at 5757 Wilshire Blvd. in the Miracle Mile. The new long-term lease is for 30,000 square feet, significantly more than the company had occupied before and at a significantly lower rate. Financial details were not disclosed.
- Nextpoint Inc., a provider of web-based technology for law firms, took out a new five-year lease on 31,418 square feet, also at 5757 Wilshire Blvd. The starting rate is $2.25 per square foot, with 3 percent increases each year, for a total value of about $2.25 million.
- Worldlink Ventures Inc., a full-service global media sales organization, renewed its six-year lease on 12,000 square feet of office space for its world headquarters in the New Wilshire building at 6100 Wilshire Blvd. The building, which recently underwent a full lobby renovation, is directly across the street from the Los Angeles County Museum of Art at Wilshire and Fairfax Avenue. The deal was valued at about $2.25 million.
- Los Angeles Magazine renewed a 10-year sublease for 14,251 square feet at 5900 Wilshire Blvd. The value of the lease was estimated at $2.25 million.
- Stun Creative, an advertising company, renewed its lease at 5757 Wilshire Blvd. for seven years, expanding its space from 8,500 to 11,200 square feet. Financial details were not disclosed.
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