The storyline didn’t change much in the second quarter along the Wilshire Corridor, which again showed dramatic improvement in year-over-year asking rates even as vacancies continued to grow.
Overall vacancy rose to 21 percent, up from 18.2 percent a year ago and 19.9 percent in the opening quarter of 2013, according to data from Jones Lang LaSalle Inc. Though more space was on the market, asking rates increased markedly – to $2.35 from $2.19 a year ago; the prior quarter was $2.23.
The star of the show, as usual, was Miracle Mile. With its proximity to high-price Beverly Hills, the western-most segment of the Wilshire Corridor regularly outshines supporting players Park Mile and Wilshire Center.
“Miracle Mile’s mixed tenant base of entertainment, advertising and professional services keeps the (sector) strong and showing good, steady performance,” said Brian Niehaus, a vice president with Jones Lang LaSalle.
The nearly Westside address allows landlords to regularly boost asking rates, and the second quarter was no exception. Rates, which jumped a whopping 25 cents from the first quarter, came in at $2.96 per square foot. Vacancy inched closer to the magical 12 percent level – hitting 13.8 percent in the second quarter, down from 14.4 percent in the first.
Lease velocity was fueled by renewals.
Media and marketing company Glam Media renewed at Wilshire Courtyard in a 2,800-square-foot, 36-month lease at $3.45 full service gross. Two tenants reupped at 5900 Wilshire Blvd. Hospitality company Interserv LP renewed its 6,800-square-foot lease for $2.85 per square foot in a 10-year deal. New York Times Co. also renewed, agreeing to a 67-month lease for 3,300 square feet at $2.92 per foot.
Park Mile charted another consistent performance, with asking rates remaining at $2.30 a square foot for a third consecutive quarter on steadily declining vacancies. The second quarter saw vacancy at 24.5 percent, down slightly from 25.5 percent in the first quarter and from 25.9 percent a year ago.
Wilshire Center performed as expected. Average asking rates were $1.72 per square foot in the second quarter, down slightly from $1.74 in the first quarter and a year ago.
“Some Mid-Wilshire landlords are now getting at or above $2 rents,” said Chris Runyen, senior managing director at Charles Dunn Co. “We haven’t seen rents in that range since many of the newer buildings in that market were built in the mid-’80s.”
The vacancy rate rose to 27.5 percent from 24.4 percent in the prior period and 22.7 percent a year ago. But that’s largely attributable, brokers said, to more accurate reporting of occupancies by Jamison Services Inc. No major relocations were reported.
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