Yet again, a strong performance from the Miracle Mile kept the weak Wilshire Corridor afloat.
Both the Wilshire Center and Park Mile submarkets gave back space during the quarter, but the improving and bustling office district further west absorbed nearly 32,000 square feet.
That drove the down the vacancy rate two-tenths of a point since the start of the year to 18.4 percent in the broader market, which stretches from the edge of Beverly Hills to downtown, according to Jones Lang LaSalle Inc.
“The positive news is we had slightly positive absorption,” said Jones Lang LaSalle broker Brian Neihaus. “So we’ve got a slow, gradual but hopefully steady recovery happening.”
Among the new entrants to the market were entertainment tenants and some tech firms.
“Two sustainable and strong industries in L.A. from a growth perspective,” as Neihaus put it.
At the 6100 Wilshire Blvd. office building alone, L.A. Realty Partners broker Lisa St. John said she closed nine deals in the first quarter alone with companies that have a creative bent. Among them was one with advertising and marketing firm Huge Inc., which is moving from West Hollywood into almost 19,000 square feet at the building.
“There's a lot of activity of people coming from Hollywood and a lot of creative and entertainment companies looking at this market because of the amenities, access to the 10 (Freeway) and very competitive rates,” she said.
Meanwhile, the Wilshire Center submarket, known for its cheap rents, lost tenants for the third consecutive quarter. The submarket, centered around Koreatown, gave back more than 15,000 square feet and saw its vacancy rate jump three-tenths of a point to 22.6 percent as companies folded or moved into buildings in other submarkets with more amenities.
“What that means to me is those companies haven’t made it, and there may be a few trying to upgrade to move,” Neihaus said.
Still, for all the up and down, asking rents rose one cent marketwide, a reflection of the many new tenants moving from more expensive markets such as Beverly Hills. Jim Kruse, senior managing director at West L.A.’s CBRE Group Inc., said that all the metrics point to improvement in the larger market.
“There are some signs of optimism in the area,” Kruse said. “We feel like we’ve hit the bottom. In the next two quarters, it will be better than the last 12 quarters.”
AEG Live renewed and expanded its lease by 4,000 square feet at Wilshire Courtyard. The L.A. entertainment company signed a three-year deal to expand into 32,000 square feet at 5750 Wilshire Blvd. Financial terms were not disclosed.
Marketing company Huge Inc. signed a six-year lease for nearly 19,000-square-feet at 6100 Wilshire Blvd. The Brooklyn, N.Y. company will move into the second and some of the third floor at the building. Financial terms were not disclosed. The company is moving from West Hollywood.
Saehan Bank signed a nearly 20,000-square-foot lease at 3580 Wilshire. in Wilshire Center with landlord Jamison Services Inc. Length of the lease was not disclosed, but industry sources estimate the firm will pay a $400,000 annual rate.
Omninet Capital LLC has purchased a 189-unit apartment building at 2200-2208 W. Eighth St. for $9.3 million in cash. Bascom Group LLC, an Irvine private-equity group, was the seller. Omninet, the investment arm of billionaire Neil Kadisha, intends to continue operating the building, the William Penn Apartment Homes, as is.
Venture Technologies Group LLC renewed its nearly 4,000-square-foot lease for its headquarters at 5670 Wilshire. The length of the deal is unknown but industry sources estimate the media company, which owns TV stations across the United States, agreed to pay about $130,000 a year.
For reprint and licensing requests for this article, CLICK HERE.