Despite a 21 percent vacancy rate, landlords along Wilshire Corridor continue to seek higher rents from tenants in advance of large-scale new residential and transit development.
According to data from Jones Lang LaSalle Inc., the average asking rate along the stretch of Wilshire Boulevard from downtown L.A. to Beverly Hills was $2.42 per square foot. That’s up 4 cents from the close of the year and 19 cents from a year ago.
At the easterly end of that stretch, Wilshire Center saw its vacancy inch down to 26.1 percent in the first quarter from 26.3 percent at year end, with average asking rates rising to $1.73 per square foot from $1.71.
“A lot of Wilshire Center is controlled by Jamison Services Inc., and it’s mostly smaller tenants,” explained Rob Waller, a senior vice president at CBRE Group Inc. “There’s not a lot of large blocks.”
Despite that, the submarket is hot with investors, with five buildings trading hands in the first quarter.
Why? The area is experiencing something of a renaissance.
“There’s been a change in the demographic there and there’s a lot of neat stuff going on,” Waller said. “The image of Mid-Wilshire is changing.”
J.H. Snyder Co.’s new residential project, the Vermont, is a key driver of the area’s regentrification.
The LEED-certified 464-unit high-rise apartment complex on the southeast corner of Wilshire Boulevard and Vermont Avenue also includes retail and recreational space.
Adding amenities like high-quality residential and new retail makes the area more appealing to office tenants, as well.
Sandwiched between Wilshire Center and Miracle Mile, Park Mile’s performance changed little from the prior period. The vacancy rate was down slightly to 27.7 percent in the first quarter from 28 percent in the December quarter. The average asking rate held steady at $2.30.
To the west, Miracle Mile saw vacancies rise to 14.3 percent from 13.5 percent at year’s end. That’s largely attributable to the Oprah Winfrey Network’s lease expiration and subsequent relocation from its 52,000-square-foot digs at Wilshire Courtyard, 5700 Wilshire Blvd. The production company will expand to the Lot at 1041 N. Formosa Ave. in West Hollywood.
Still, landlords continue to seek higher rates, increasing the average asking rate to $3.10 per square foot from $3.04 the prior quarter.
“This is a very interesting time in the life of Miracle Mile,” noted Neil Resnick, principal with Avison Young. “The Academy of Motion Pictures is creating their landmark museum on the northeast corner of Wilshire and Fairfax. This alone will be a huge drawing card to both tourists as well as locals.”
The 290,000-square-foot building will be reworked by Pritzker Prize-winning architect Renzo Piano and contemporary architect Zoltan Pali.
“If all goes as planned, the Purple Line will be constructed across the street and provide service between downtown Los Angeles and Westwood. Word has it that the City has been considering turning the Johnie’s Coffee Shop Restaurant on the northwest corner of Fairfax and Wilshire into the Purple Line Station,” Resnick said. The building was designated an historic-cultural landmark by the L.A. City Council last year.
“In many respects the Miracle Mile is the center of the city,” he said, “bridging the West LA market with downtown – and it looks like the cool factor is about to make it even more desirable.”
The Superior Court Building at 600 S. Commonwealth Ave. in Mid-Wilshire traded for $50 million. The 315,949-square-foot Class A office building was purchased by Jamison Services Inc. from Commonwealth Management.
Jamison unloaded the 24,500-square-foot retail and office building at 1105-15 W. Adams Blvd. in Mid-Wilshire, selling to Hoover-Adams Holding LLC for $6.2 million.
GKT-Wilshire-CA LLC purchased the 23,328-square-foot retail property known as Shops @ The Mercury for $15.7 million. The sellers of the 3810 Wilshire Blvd. property were Dr. Moo Kown and Dr. Myoung Kwon.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Miracle Mile Thrives, While Rents Stay Low Toward Downtown
- Refugees From Tighter Markets Fill in Empty Space Along Strip
- Park Mile Campus Seen as Big Draw for Deal-Hunting Tenants
- Miracle Mile Paces Field as Residential Development Moves In
- 6300 Wilshire Talk, Departure of E! Boosts Profile of Miracle Mile
- WILSHIRE CORRIDOR: Vacancies, Downtown Proximity Attracts Firms
- Miracle Mile Records Only Large Lease Deals in Steady Quarter
- Real Estate Quarterly: Landlords Kick Up Asking Rates Despite Losses on Miracle Mile