From east to west, the Wilshire Corridor performed steadily in 2013. Overall, rents were up on the year, rising 16 cents from the prior December to close the fourth quarter at $2.38, according to figures from Jones Lang LaSalle Inc. Over that same period, vacancy held relatively firm, crawling up from 19.2 percent at the end of 2012 to 20.6 percent to close out 2013.
Fourth quarter asking rents were up a cent from the prior period as the vacancy rate inched up three-tenths of a point.
But change is afoot, and landlords, tenants and brokers expect the submarket to get pretty interesting this year.
Most of the attention is focused on Park Mile, the market bridging low-budget Wilshire Center and highfalutin Miracle Mile.
Farmers Insurance announced in the third quarter that it was consolidating its operations to Woodland Hills, and its 402,000-square-foot Wilshire Boulevard property hit the market in the final quarter. Called the Wilshire Campus, the three-building offering includes 4680, 4700 and 4750 Wilshire, and a parking lot at 4622 Wilshire. It might be sold as a group, individually or converted to residential, according to Chris Runyen, senior managing director at Charles Dunn Co. Inc.
At 28 percent in the fourth quarter, the vacancy rate is already high in Park Mile, and while it is up from the 26.8 percent posted a year ago, it was nearly a point lower than the third quarter. Asking rents for Class A space have held firm at $2.30 for several quarters.
Demand stayed strong for floor plates in the Miracle Mile stretch of Wilshire.
In the biggest deal of the quarter, Cedars-Sinai signed a 12-year, 318,000-square-foot lease at 6500 Wilshire in a mixed expansion/renewal deal. Terms were not disclosed.
The area continues to attract entertainment and creative clients, with both the Directors Guild of America and PR firm Cohn & Wolfe inking deals in the fourth quarter.
The vacancy rate was around 13 percent all year, which empowered landlords to increase asking rates to $3.04 per foot a month in the fourth quarter from $3.01 in the prior period and $2.69 a year earlier.
That’s good news for developer J.H. Snyder Co., which is nearing a start to its project at Museum Square, a 250,000-square-foot, 13-story office building at 620 Curson Ave. geared toward entertainment and creative tenants.
Wilshire Center also held steady, with asking rates continuing to hover close to $1.70 as vacancy ticked up to 26.3 percent from 25.6 percent in the prior period. With dominant landlord Jamison Services Inc. finally listing its available space publicly for the first time, net absorption shifted to negative 158,837 square feet.
– Margot Carmichael Lester
Office Market At a Glance
Inventory 11.2 million square feet
Under Construction 0
Class A Asking Rents $2.38
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