Real estate market data from different firms can vary, as people who follow the numbers can attest.
That’s to be expected, researchers say.
“All the major firms are going to have slightly different numbers,” said Eric Kenas, market research director for Cushman & Wakefield, which puts out a quarterly report on the Los Angeles County office market.
Numbers for the firm’s second-quarter office market report didn’t quite match up to numbers reported in Jones Lang LaSalle’s second-quarter report for the region, which the Business Journal used last month for the Real Estate Quarterly Special Report.
Kenas said the slightly different numbers among real estate firms result from their different methodologies and report release dates.
“We all have slightly different numbers, and we all have slightly different standards, that’s common knowledge,” Kenas said. “Some people will use JLL and some will use us, and they’re never going to line up, but the trends should be relatively similar.”
Still, data analysts from Cushman & Wakefield, JLL and others make time to compare notes.
“For the most part it’s hard to keep up with a market of this size, so we actually have quarterly research council meetings with (research) representatives from all the major firms and talk about the market,” he said.
According to Cushman & Wakefield’s second-quarter report, there’s still a lot of room for job growth, even as it slows in the county.
Businesses are adding jobs at a slower pace, but demand for office space is expected to remain strong as the local tech sector continues to thrive, the report says. The county’s unemployment rate fell to 4.4 percent in June from 5.3 percent a year ago, according to the report.
The overall county office market posted its 15th consecutive quarter of gains in the second quarter of this year, absorbing 209,091 square feet, the report says, though that’s far below the 2016 quarterly average of 621,310 square feet. Most office move-ins occurred in downtown L.A.’s central and south submarkets where rent growth over the year was strongest, according to the report.
That differs from JLL’s study, which put the county’s second-quarter office space absorption at 621,674 square feet, while the vacancy rate declined to 15 percent.
Other highlights of Cushman & Wakefield’s report include that the office market in the central business district of Los Angeles, comprising Bunker Hill and the Financial District, posted another quarter of marginally positive net absorption of 31,867 square feet. Average asking rents rose 5.1 percent from last year, reaching $3.46 a square foot per month, the report says.
Demand for residential, office, hotel and retail space was expected to increase, and rental rates were expected to inch up, even as new supply was keeping the central business district vacancy rate flat.
Demand remained healthy on the Westside office market as new leasing reached over 2 million square feet midyear, according to the report.
Among the major Westside deals was the sale of Wilshire Palisades at 1299 Ocean Ave. in Santa Monica to a joint venture between Douglas Emmett and Qatar Investment Authority for $352 million, or $1,460 a square foot of rentable office space, according to the report.
Internet-Proof Investment
CBRE announced the sale this month of three 99 Cents Only stores across the county at a combined $12.4 million – more than $170,000 above the list prices.
Patrick Wade, senior vice president for the brokerage, said there was a tremendous amount of investor interest for the three free-standing properties in Walnut Park, Huntington Park and Hawthorne. 99 Cents Only recently signed 10-year leases at all three locations.
Interest remains strong for discount retailers in high-density established neighborhoods, Wade said.
“All three of them were in very dense infill locations, and so each of these stores had a long operating history at each respective site,” he said. “Just based on what we’ve seen in the last couple of years, a lot of investors are concerned about e-commerce, but discount stores are very internet-resilient retailers.”
Discount chains are among the retail operators who have maintained sales despite competition from online shopping.
“I would say during the recession, when everyone was more cost-conscious, they had sales trends going up,” Wade said. “These types of dollar stores expanded during the recession and there are still a lot of consumers looking for value-based goods.”
The store in Walnut Park was purchased by Santa Monica-based M & M Investments, and the locations in Huntington Park and Hawthorne were both acquired by L.A.-based Aria Venture Capital.
Staff reporter Neil Nisperos can be reached at [email protected] or (323) 549-5225, ext. 237.
