DOWNTOWN
Downtown’s office vacancy rate continued to rise in the fourth quarter to 17.2 percent from the third quarter’s 16.7 percent and 16.4 percent a year earlier. Class A rents lost eight cents over the quarter and slipped to $3.51 a square foot on average and but fell only a penny year over year. Net absorption turned negative over the quarter to nearly 143,000 square feet.
Main Events
Chicago-based investor GEM OPS purchased the Norton Building, a five-story, 81,200-square-foot office building at 755 S. Los Angeles St. for $23 million from Urban Offerings.
Santa Monica-based Bow West Capital bought 718-722 S. Hill St., a seven-story, 55,000-square-foot mixed-use building, for $14 million from Urban Blox.
Metrolink leased 30,000 square feet of space at 900 Wilshire Blvd. The 160,000-square-foot Wilshire Grand Office Centre, owned by Thomas Properties Group Inc., sits on nearly 3 acres and was built
in 1986.
HOLLYWOOD
Hollywood’s office vacancy rate tightened noticeably in the fourth quarter of 2017, dropping to 14.8 percent from 16.4 percent in the prior quarter and 21.6 percent in the year-earlier period. Class A rents fell a penny from the previous quarter to $4.47 a square foot, but rose two cents compared to a year earlier. Net absorption was 54,877 square feet. The area had nearly 436,000 square feet under construction.
Main Events
Santa Monica-based Miramar Capital Advisors purchased the Citizen News Building, two stories and 49,000 square feet at 1545 Wilcox Ave. for $23 million from KOAR Institutional Advisors. in December. The iconic structure in the heart of Hollywood sits on just under 1 acre and was built in 1930 but recently renovated.
Slickdeals signed a lease for nearly 12,000 square feet at Sunset Media Center at 6255 W. Sunset Blvd. The Class A office building, bought in 2012 for $76 million by Kilroy Realty Corp., sits on 1.35 acres with an outdoor plaza and creative office space. Tenants include StyleHaul, OpenTable and Film L.A.
WESTSIDE
Westside office vacancies climbed more than a percentage point to 14.8 percent in the fourth quarter from the year-earlier period.
Culver City had the highest vacancy rate at 29.7 percent, pushed up by more than 456,000 square feet of office space under construction.
Santa Monica saw its office vacancy rate fall to 12 percent in the fourth quarter from 13.4 percent during the previous quarter.
Santa Monica was the most expensive Westside community to rent office space at $5.99 per square foot, up two cents from the third quarter.
Main Events
Douglas Emmett Inc. purchased the 146,300-square-foot office building at 9401 Wilshire Blvd in Beverly Hills for $144 million from MGM Management Co.
Olive Hill Group paid $117 million for a 113,000 square-foot-office building at 520 Broadway in Santa Monica from Tishman Speyer.
Mishel Mikail sold Wilshire Medical Center, a three-story, 32,824-square-foot office building at 2121 Wilshire Blvd in Santa Monica, to Bolour Associates for $28 million.
SBMC Mesmer sold the Playa Vista Medical Offices at 5620 Mesmer Ave. in Culver City for $24 million to Playa Vista Real Estate.
SANTA CLARITA VALLEY
Santa Clarita Valley’s office vacancy rate rose to 11.4 percent in the fourth quarter of 2017 from 11.1 percent in the third quarter but fell from 12 percent in the year-earlier period. Class A rents stayed flat from the prior quarter at $2.78 a square foot. Negative net absorption was 7,881 square feet.
Main Events
Dietary supplements manufacturer Lief Organics purchased a 47,350-square-foot industrial warehouse at 28510 Industry Drive in Valencia from T. Viole Construction Co. Inc. for $6.9 million.
The city of Santa Clarita bought a two-story, 7,200-square-foot office building at 18436 Sierra Highway in Canyon Country from Leslie Nishanian of Van Nuys for $3.5 million, or more than $481 a square foot. The two-story property sits on less than an acre, and was built in 1977. The city bought the property in October.
Encino’s Exer More Than Urgent Care opened a 6,660-square-foot clinic in Santa Clarita in October with partners Providence Health & Services as its seventh location.
SAN FERNANDO VALLEY
The San Fernando Valley’s office vacancy rate fell to 11.7 percent in the fourth quarter from 11.9 percent in the third quarter and from 12.9 percent in the year-earlier period. Class A rents dropped three cents to $2.79 a square foot over the quarter. Net absorption was 5,993 square feet. There was 218,267 square feet under construction.
Main Events
San Francisco-based developer Swift Real Estate Partners bought a six-story, 75,000-square-foot office building at 4640 Lankershim Blvd. in North Hollywood from Curo Enterprises for $23.5 million.
Sharona Cohen of ESH Properties sold a five-story, 78,200-square-foot office building at 5900 N. Sepulveda Blvd in Sherman Oaks for $16.8 million to Pacific Investment Group.
Ali Sheybani Medical Inc. of Sherman Oaks acquired 15450 Ventura Blvd., also in Sherman Oaks, for $740 a square foot, or about $3.8 million. The 5,100-square-foot office building was built in 1986 and the seller was 2001 Edward Daniel Betz Trust, also of Sherman Oaks.
TRI-CITIES
Office vacancies continued their march upward in the Tri-Cities of Burbank, Glendale and Pasadena to 13.6 percent in the fourth quarter compared to 12.7 percent in the third quarter and 11.6 percent in the year-earlier period. Class A rents also rose to $3.13 a square foot from $3.09 in the third quarter. Net absorption turned negative across the submarket and in Burbank, while remaining negative in Glendale and Pasadena from the prior quarter.
Main Events
Hana Asset Management and Ocean West Capital Partners purchased the DreamWorks Animation campus in Glendale from Griffin Capital Co. for $290 million.
Blackstone sold two office buildings totaling 426,863 square feet at 700 N. Central Ave. and 800 N. Brand Blvd in Glendale to CBRE Global Investors for $122 million.
Doheny Eye Institute of Los Angeles acquired
the 115,000-square-foot structure at 150 N. Orange Grove Blvd. in Pasadena for $50 million, or nearly $435 a square foot.
WILSHIRE CORRIDOR
The Wilshire Corridor’s office vacancy rate dropped to 19.8 percent over the fourth quarter from 20.7 percent in the third quarter, but climbed from 18 percent from the year-earlier period. Class A rents rose to $3.05 a square foot, up three cents from the third quarter. Net absorption was 91,880 square feet.
Main Events
Koreatown-based developer Mitaa Group purchased a two-story, 153,000-square foot hospital building at 3160 Geneva St. from Shiners Hospital for Children for $24 million.
Developer Jamison Services bought three office buildings totaling nearly 72,000 square feet at 3330 and 3324-3328 Wilshire Blvd and 656 S. Catalina St. from Jingbo Lou of Pasadena for $15.5 million.
Rockpoint Group of Boston, Mass. paid $210 million – about $472 a square foot – to N.Y. hedge fund Blackstone Group for the 445,000-square-foot, Class A office structure at 5670 Wilshire Blvd. The deal closed in October.
SOUTH BAY
The South Bay’s historically tight industrial market saw relief in the quarter, with vacancies increasing to more than 1 percent from the prior quarter. More than 730,000 square feet is under construction in the submarket, while 3.3 million square feet was either sold or leased, nearly triple the deal volume from the prior quarter. Rents jumped 13 cents year over year. Comparatively, the submarket’s office vacancy rate is declining, reaching 15.8 percent in the quarter.
Main Events
General Motors Pension Trust, an account managed by BlackRock, sold three office buildings that total 1.6 million square feet at 100, 200 and 220 N. Sepulveda Blvd. in El Segundo, for $611 million to Starwood Capital Group.
Irvine-based developer Sares-Regis Group acquired the former Toyota campus in Torrance for $270 million.
A portfolio of three buildings and a parking garage, Campus 2100, at 2100, 2120 and 2150 Grand Ave. in El Segundo, was purchased by Deutsche Asset & Wealth Management in Chicago for about $117 million.
SAN GABRIEL VALLEY
The San Gabriel Valley’s industrial vacancy rate rose slightly to 1.8 percent from 1.7 percent in the prior quarter and 0.9 percent in the year-earlier period. Rents increased to 72 cents a square foot from 68 cents in the third quarter. Nearly 2 million square feet was sold or leased. There was 1.5 million square feet under construction.
Main Events
Blackstone Group paid $500 million for 4 million square feet among 38 industrial properties, six in La Mirada and 25 in the City of Industry, for $500 million. The seller was Principal Real Estate Investors.
Duke Realty purchased a 432,000-square-foot industrial property at 825 Ajax Ave. in the City of Industry from Bridge Development Partners for $66.5 million. The sale was part of a $121 million portfolio.
InChrist Community Church Valley Chapel of Porter Ranch purchased 588 Atlas St., the Atlas Corporate Center, on Oct. 24 for $10.5 million, or nearly $122 a square foot, from Waypoint Property Group of Newport Beach. The 86,000-square-foot structure sits on nearly 5 acres and was built in 1980.
