The Wilshire Corridor arrived at the midyear mark on a raft of steady performance. Data from Jones Lang LaSalle Inc. show asking rates of $2.42 per square foot were unchanged from the previous quarter and up from $2.35 the year prior. Vacancy rates ticked down a bit to 20.2 percent from 20.8 percent in the first quarter and 21 percent a year ago.
“Perhaps the important trend to note is that vacancy and pricing continue to trend, ever so gradually, towards an overall healthier market,” said Brian Niehaus, a JLL vice president. “This market doesn’t typically attract the creative/tech sector, so the demand has remained gradual and consistent, more reflective of the overall economy than a specific rapidly-expanding industry sector.”
Wilshire Center continues to provide “a relatively inexpensive option for office space with abundant parking and access to surrounding areas via the Metro system,” said Chris Runyen, senior managing director at Charles Dunn Co. Inc.
Vacancy continued to dip, closing out the second period at 25 percent, down from 26.1 percent in the first and 27.5 percent a year ago. The average asking rate was $1.71, virtually unchanged from $1.73 in the opening period and $1.72 of 12 months ago.
The Park Mile stretch in the midsection of the Wilshire Corridor also remained steady. Vacancy dropped a tad to 27.3 percent at midyear from 27.7 percent in the previous quarter. Landlords held steady on asking rates of $2.30 per square foot, the same as the prior quarter and year earlier.
“Park Mile provides a higher-quality alternative to Wilshire Center with free parking,” Runyen said. “It’s a good choice for growing enterprises wanting to be close to entertainment and creative companies in nearby markets.”
Miracle Mile remained the star performer. Vacancy was tight at 14.1 percent in the second quarter, down from 14.3 percent in the first. Landlords nudged asking rates north to $3.12 per square foot from $3.10 in the first quarter and $2.96 one year ago.
“With a healthy mix of tenants in the market Miracle Mile will be in demand as long as institutional owners continue to recognize the value in the commercial assets there,” Niehaus said. “Proximity to other premium markets like Beverly Hills, West Hollywood and a resurging Hollywood only make Miracle Mile more desirable and, relatively, a lower-cost option for tenants considering a larger geography in terms of footprint or relocation.”
Residential development was hot at both ends of the Wilshire Corridor, signaling a change in the submarket’s traditional bread-and-butter business.
“Turning vacant properties, take BRE’s development at the southeast corner of Wilshire and La Brea, for example, into hundreds of new apartment units transforms a neighborhood by adding ground-floor retail, creating a need for more nearby retail, puts more people out on the street beyond typical business hours and gives potential employees of office buildings a place to live in L.A. with no commute,” Runyen said.
Miracle Mile is “transforming into a more densely populated residential market with approximately 1,000 new apartments or condos developed in the past five years,” he added.
On the other end, many of Jamison Properties’ buildings are being converted to apartments. The transition further reduces available office inventory in the area –good news for CIM Group as it repositions and redevelops the Wilshire campus vacated by Farmers Group Inc.
– Margot Carmichael Lester
Christ Unity Manor sold the 156-unit affordable housing complex at 615 S. Manhattan Place for $22.5 million, $144,231 per unit, to Seattle-based Vitus Group.
Local apartment developer MJW Investments Inc. purchased the 53-unit apartment building at 450 S. La Fayette Park Place for $8.3 million, $156,604 per unit, from Allen Averbook of Pinehurst, N.C.
CIM Group plans to redevelop and reposition the three-building Farmers Group Inc. Wilshire campus (4680, 4700 and 4750 Wilshire Blvd.) and the parking lot at 4622 Wilshire. The company acquired the property from Farmers in the first quarter; the deal closed in the second.
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