-Prometheus Global Media signed a seven-year, 3,100-square-foot deal at 5700 Wilshire Blvd. for $3.65 per square foot.
-Financial software developer Verifi inked a 30,000-square-foot, five-year renewal and expansion at 5670 Wilshire Blvd. for $3.70 per square foot.
-At Central Plaza 4, 3470 Wilshire Blvd., parking services provider SP Plus Corp. renewed 22,000 square feet for undisclosed terms.
-Raymond Realty took 4,000 square feet in a five-year deal at 3250 Wilshire Blvd. for $1.80 per square foot.
-Intercontinental Real Estate Group and Swig Co. purchased 6300 Wilshire Blvd. for $151 million from Legacy Partners Commercial and Brookfield Office Properties Inc. The Class A building is 407,915 square feet.
-Continental Development Corp. bought a 34,000-square-foot creative office building at 8075 W. Third St. for $19.6 million from Souferian Group. The recently renovated building was fully leased at the time of sale.
Headline-watchers might be eyeing all the development in downtown Los Angeles, but savvy tenants seeking affordable space with a growing residential population and increasingly easy access to other parts of the city are focused on Wilshire Corridor.
For the second quarter, average asking rates remained around the mid-$2 level, hitting the half-year at $2.49 per square foot on 19.2 percent vacancy, according to data from Jones Lang LaSalle Inc.
The area is earning notice thanks to a “growing reputation as the new edgy destination for tech and startups, and the potential for removal of some office space as adaptive reuse to multifamily,” said Alex Bergeson, an associate at CBRE.
Brokers agree that the increased residential density is attractive to commercial tenants relying on foot traffic or whose employees are drawn to the area’s housing affordability and increased amenities.
“All the museums are undergoing renovation,” added Joel Frank, a CBRE vice president. “And the nearing Metro Purple Line completion is also fueling investment.”
Deal velocity was slightly higher in the quarter, led as usual by Miracle Mile, which benefits, Bergeson said, “from exploding growth and rents in Hollywood, Culver City and Beverly Hills.”
These attractive fundamentals kept investors interested at midyear.
Intercontinental Real Estate Group and Swig Co. acquired a 408,000-square-foot Class A building at 6300 Wilshire Blvd. for $151 million from Legacy Partners Commercial and Brookfield Office Properties Inc. Continental Development Corp. acquired Beverly Grove, a 34,000-square-foot creative office conversion at 8075 W. Third St., for $19.6 million from Souferian Group.
Chris Giordano, an associate with Charles Dunn Co. Inc., said transit was a big factor.
“More and more people are using the Metro and ridesharing like Uber,” he said. “That means there are fewer cars on the street and it’s easier to get to downtown. With Metro opening up in Santa Monica, it’s going to make it even easier to get to Wilshire from the Westside. That could bring more people to the area, and office and multifamily vacancy rates will drop.”
Office vacancy was highest in Park Mile, which has been at 27 percent for more than a year. Monthly asking rates were steady, at $2.30 a square foot.
Wilshire Center’s vacancy rate ticked down to 23.3 percent at midyear while second-quarter asking rates rose 13 cents to $1.83 per square foot.
“Jamison Properties is closing up some of its office buildings and changing the mix to multifamily or mixed use,” Giordano noted. “That’s raised the prices of every single building in Wilshire Center.”
Miracle Mile remained tight, closing the second quarter at 13.7 percent vacancy, down from 14.3 percent in the prior period. First-quarter average asking rents were $3.24 a square foot; by midyear, they had risen to $3.82.
“The Comcast space being put on the market at Wilshire Courtyard (5700-50 Wilshire), has bumped asking rates up … significantly,” Frank said.
– Margot Carmichael Lester
For reprint and licensing requests for this article, CLICK HERE.