-Jessica Alba’s consumer good business Honest Co. leased 80,000 square feet at Clarion Partners’ i|o, at 12130 Millennium Drive in Playa Vista, relocating from Santa Monica. The deal could be valued in excess of $49 million
-Kinetic Content renewed its 36,000 square feet and expanded into 17,000 more at 11755 Wilshire Blvd. in Brentwood. Terms were unreported.
-In Beverly Hills, Clarion sold its 118,000-square-foot building at 100 N. Crescent Drive to Cain Hoy for almost $1,100 per square foot.
-Lexington Commercial sold a 53,764-sqare-foot building at 9350 Wilshire Blvd. to Hakim Holdings for approximately $800 per square foot.
-Adult entertainment company Larry Flynt Publications sold a 20,500-square-foot mixed-use building at 8920 W. Sunset Blvd. in West Hollywood to New York-based VE Equities for $18.3 million.
-A 103,800-square-foot, Class A creative office campus at 17383 Sunset Blvd. in Pacific Palisades was sold to New York real estate equity firm Brickman for $53 million, or about $500 a square foot. Sellers were Lincoln Property Co. and Linwood Investments.
One word describes third-quarter commercial real estate activity on the Westside: movement.
Asking rates moved up. Tenants moved around. The Expo line moved forward. And investors moved in.
According to data from Jones Lang LaSalle Inc., average asking rates rose from $4.20 a square foot at midyear to $4.39 in the third quarter. Asking rents have risen 10 percent over the last 12 months.
“Despite the upward pressure and velocity on rental rates, the market is still below peak rates in many Westside submarkets,” said Jaclyn Ward, a JLL associate in Century City. “Tenant demand and landlords’ bullishness will remain consistent at least through next year’s election, subject to government tinkering of interest rates.”
Playa Vista’s magnetism continued to attract tenants. One of the most significant transactions was consumer good business Honest Co.’s relocation from Santa Monica to 80,000 square feet at Clarion Partners’ i|o building in Playa Vista. Though terms were not disclosed, the deal could be worth more than $49 million.
Average asking rates for Class A office space in Playa Vista closed out the period at $4.16 a square foot, up sharply from $3.78 at midyear and $3.57 12 months prior. Further illustrating the submarket’s volatility, Playa Vista’s vacancy ended the quarter at 19.5 percent, up from 15.7 percent for the second quarter and down from 25.6 percent a year ago.
Brokers attribute the shifts to large-block tech and creative clients consolidating operations or growing quickly.
In Santa Monica, asking rates rose on declining occupancy. Landlords asked $5.19 a square foot last quarter, up 70 cents from the same time last year. Third-quarter vacancy was 18.7 percent, up from 10.6 percent a year ago. A big chunk of space came back on the market – more than 480,000 square feet – pushing the year-to-date net absorption to negative 657,630 feet.
Ward attributes that to “a flight from Santa Monica. Imax moving earlier this year into their own building, Riot Games giving back its space at Colorado Center, and Yahoo and Colony Capital relocating out of market.”
Investor interest remained strong through the third quarter, especially in the always attractive Beverly Hills submarket.
“Clarion Partners sold 100 N. Crescent (Drive) through a brokerage partnership of Eastdil Secured and CBRE for record pricing of almost $1,100 per square foot for this 118,000-square-foot building,” noted Stanley Gerlach, senior vice president at CBRE in Beverly Hills. The buyer was Cain Hoy. “(That) represented the highest office building price per square foot on the Westside in a building that did not include any retail or medical space.”
Also in the city, Hakim Holdings purchased a 53,764-sqare-foot building at 9350 Wilshire Blvd. for approximately $800 a square foot from Lexington Commercial.
In addition to speculating about how high rents will go, Westside denizens are talking about rapid transit, thanks to Los Angeles County Metropolitan Transportation Authority’s Expo Line.
– Margot Carmichael Lester
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