By HANNAH MADANS Staff Reporter
Companies looking for large blocks of office space to relocate or grow – especially on the Westside – may be out of luck.
Brokers agree that there just aren’t that many options for these types of spaces, particularly those that are 100,000 square feet or more.
“You haven’t seen a ton of development but have seen an increase in existing tenants growing and new tenants coming out of nowhere and expanding rapidly,” said Jeff Cowan, senior managing director at Savills Studley Inc.
In the last year, there were just 14 leases signed for spaces of more than 100,000 square feet, according to data provided by Jones Lang LaSalle Inc. In 2018, three deals for spaces of more than 100,000 square feet were signed in the central business district, one was signed in L.A. North, two were signed in the Mid-Wilshire area, one was signed in the South Bay, two were signed in the Tri-Cities area and five deals of more than 100,000 square feet were signed on the Westside.
Companies that signed big leases included Bytedance, which signed a 118,975-square-foot lease in Culver City in October; Anthem Blue Cross & Blue Shield, which signed a 169,320-square-foot lease on a building in Woodland Hills in August; Honey, which signed a 130,000-square-foot lease in the Arts District in August; and Warner Bros., which signed a 415,949-square-foot lease in Burbank in May.
JLL Managing Director Josh Wrobel said a lot of this comes from a few big tenants like Google, Netflix Inc. and WeWork Cos. Inc. leasing huge amounts of space.
“The 10 biggest growth tenants in L.A. from 2012 through 2019 have 7.4 million square feet of growth,” he said.
At the end of 2017, there were 11 available 100,000-square-foot plus blocks of office space from Hollywood to Playa Vista. At the end of 2018, there were only seven, Wrobel added.
The lack of available spaces has led to preleasing, a trend where companies lease buildings months or even years away from completion.
“Historically, L.A. is not a market that preleases new development,” Wrobel said. “If you look at this last wave of new development, nearly 2 million square feet is preleased.”
In the fourth quarter, Los Gatos-based Netflix signed two high-profile leases in Hollywood for Hudson Pacific Properties’ 328,000-square-foot Epic building and for Kilroy Realty Corp.’s 355,000-square-foot Academy on Vine.
This month, Google preleased One Westside, the Westside Pavilion conversion from a mall to creative office space.
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