Office Market At a Glance
Inventory:
42.2 million
Under Construction:
478,000 square feet
Class A Asking Rents:
$3.74
The strong economy, high occupancy and desirable addresses are enabling Westside landlords to wring higher rents out of their tenants.
The Westside’s average asking rent rose 69 cents in the last year, according to Grubb & Ellis Co. Santa Monica landlords led the charge, closing out the first quarter with an unprecedented $5.17-per-square-foot asking rate. Also flying high was Westwood, where owners are asking $4.09 per square foot for space that two years ago was going for $2.79.
“I don’t recall ever seeing asking rates of this magnitude in my 20-year career,” says Neil Resnick, executive vice president of transaction services with Grubb & Ellis. “And annual increases are going up, too, from a standard of 3 percent to 4 (percent), and in some cases landlords are pushing that.”
High prices didn’t slow lease activity in Century City, which had the most space available at 14.3 percent vacancy in the opening period. Much of the vacant square footage is at the 790,121-square-foot 2000 Avenue of the Stars, which came on line early this year and is only about one-third leased.
“Space that is still available will likely be occupied quickly as the submarket is almost completely full with no new entitlements allowable in Century City,” said Richard Schnell, senior vice president of Colliers International. Vacancies of 8.6 percent in West Los Angeles or lower in adjacent markets also helped funnel deals to the area.
And with average asking rates for top-tier buildings at $3.62 per square foot in the first quarter, Century City remains affordable compared to other desirable Westside submarkets.
MAIN EVENTS
-CENTURY CITY: At Watt Plaza Towers,1875 Century Park East, the law firm of Epstein Becker & Green P.C. inked a 10-year, $8.7-million lease for 24,500 square feet. The Rogers Group PR firm renewed for 19,000 square feet in a 5-year, $3.7-million deal. Also renewing: JP Morgan Chase for five years at undisclosed terms and Premier Business Centers for 38,000 square feet at $6.5 million. Elsewhere, Korn Ferry International expanded by an additional 1,129 square feet at 1900 Avenue of the Stars in a 9-year deal at $3.05 per square foot. McDermott Will & Emery renewed for 80,000 square feet in a 15-year deal for unreported terms at 2049 Century Park East.
-BEVERLY HILLS: Real estate investment groups Angelo Gordon & Co. LP and Cambra Realty acquired the Wilshire Spaulding Building, 120 S. Spalding Dr., for $41.9 million from Arden Realty Inc.
-BRENTWOOD: Chadwick, Saylor & Co. Inc. renewed its sublease in a $1.3-million, five-year transaction for 5,187 square feet at the World Savings Building, 11601 Wilshire Blvd.
-CULVER CITY: Broadreach Capital Partners, based in Palo Alto, acquired the 204,600-square-foot, two-building office complex at 200 and 300 Corporate Pointe in Culver City from Scanlan Kemper Bard for $51.2 million, or about $250 per square foot. The Portland-based real estate investment and banking company acquired the complex about two years ago for $39 million and performed some cosmetic upgrades that helped improve its occupancy level.
