Construction giant Skanska signed an eight-year lease for approximately 16,000 square feet at 5055 Wilshire Blvd., owned by Somerset Group.
Two transactions were inked at 6300 Wilshire. Seattle-based Getty Images renewed its lease for approximately 22,000 square feet, reportedly for 12 years. ViSalus also renewed its lease for approximately 12,000 square feet. Terms were not disclosed.
The Building Industry Credit Association leased 3,200 square feet in a three-year deal at 251133 W. Third St. Terms were not reported.
Bethesda Christian University bought the 32,100-square-foot office building at 2116 Arlington Ave. in Mid-Wilshire for $4.5 million, or $140.20 per square foot. The 29-year-old building was sold by Robert Englekirk Consulting Structural Engineers.
Hae & Myong Sim 2000 Family Trust sold the 17,100-square-foot medical office building at 2405 W. Eighth St. to an undisclosed buyer for $4.2 million, or $245.90 a square foot.
While the klieg lights were shining in Hollywood and downtown Los Angeles for awards season, Miracle Mile was getting ready for its close-up as the E! Entertainment space at Tishman Speyer’s Wilshire Courtyard complex, 5700-50 Wilshire Blvd., hit the market and word of a deal for 6300 Wilshire sent ripples of anticipation up and down the corridor.
“The (E!) space is being marketed for January 2017 delivery and the west building, with 425,000 square feet of pending availability, will be among the largest blocks of quality space west of downtown Los Angeles,” said Patrick Amos, senior associate at CBRE Group Inc.
Miracle Mile landlords increased asking rates in the first quarter, with the average rising to $3.24 a square foot from $3.09 at the end of the year. The submarket had a 14.3 percent first-quarter vacancy rate, down from 14.6 percent at year-end.
“Miracle Mile is commanding rental rates it hasn’t in some time,” said Neil Resnick, an Avison Young principal. “With rental rates in Beverly Hills now in the mid-$4 to high-$5, Miracle Mile would represent an economical alternative. For someone who’s really looking for significant savings, the drive literally and figuratively will be east to Miracle Mile and south toward (Los Angeles International Airport) and the South Bay.”
Investors have taken note.
“There’s been a lot of investor interest in the Wilshire Corridor since Tishman made their big investment,” said Bob Safai, a principal at Madison Partners. Wilshire Courtyard, where the Business Journal has its offices, underwent a significant renovation last year, upgrading one of the submarket’s premier properties. “Even out-of-town investors looking for value are now looking at secondary markets like Wilshire Corridor.”
On the development front, residential and mixed-use projects continued to perform well as the Los Angeles County Metropolitan Transportation Authority line inches closer to becoming a reality.
“That story continues in this submarket,” said Lee Shapiro, executive vice president for Kennedy Wilson’s brokerage group. “We’re now seeing services coming in behind the retail.”
Performance in Wilshire Center and Park Mile remained virtually unchanged, with little activity in the opening quarter. But a wave of conversions is rolling through Wilshire Center as Jamison Services Inc. continues to convert office buildings to apartments.
“This started with two buildings at 3075 Wilshire and 3350 Wilshire, but there are as many as six more buildings slated to be converted over the next 24 months,” said Chris Runyen, senior managing director for Charles Dunn Co. Inc. “This would reduce the inventory of office buildings in the Wilshire Center market by over 1 million square feet – approximately 20 percent – or virtually all of the vacancy in the market.”
For the Wilshire Corridor overall, vacancy remained relatively high at 19.6 percent, down slightly from 19.9 percent at year’s end. Average asking rates rose to $2.48 per square foot from $2.40 in the prior period, according to data provided by Jones Lang LaSalle.
– Margot Carmichael Lester
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