Real Estate Quarterly Report: Q1 2022
Industrial Developers Eye Office to Industrial Land Plays
L.A. County Real Estate Submarket Data Summary
Downtown
Downtown’s first-quarter office vacancy rate rose to 22.4%, up from 21.2% the previous quarter and 18.8% the previous year. There was no office product under construction during the quarter and negative 367,401 square feet of space was absorbed in the market. Asking rents were down 3 cents year over year but steady quarter over quarter at $3.83 a square foot.
Main Events
St. Louis-based architecture firm HOK Group Inc. is moving out of its long-term L.A. home in Culver City to the Arts District, signing a lease at ROW DTLA, a mixed-use project in the Arts District.
Adidas signed on to be the anchor tenant at Brookfield Office Properties Inc.’s California Market Center. It will occupy 107,000 square feet and a private skydeck at the property.
One Wilshire, a large data center in downtown, received a $389 million refinancing loan.
Creative agency Buck Design purchased an office building at 120 South San Pedro St. in Little Tokyo for $26.5 million from Beverly Hills-based Brickstar Capital.
A luxury apartment complex in downtown with 208 units near L.A. Live has received a $90 million permanent placement loan, replacing a maturing construction loan.
Hollywood
Hollywood’s office vacancy rate increased to 29.8%, up from 29.1% the previous year but steady quarter over quarter. Rents increased to $5.36 a square foot, up 15 cents over the previous quarter but down 7 cents over the previous year. Net absorption was 15,560 square feet and no construction during the quarter.
Main Events
New York-based developer Georgetown Co. purchased an office campus leased to streaming giant Neftlix Inc. at 1350 North Western Ave. in Hollywood for $93 million.
West Los Angeles-based developer California Landmark Group received $84.8 million in financing to recapitalize two apartment buildings in L.A. including the 79-unit HW by CLG in Hollywood.
Hollywood Holdings purchased the fully occupied 42,916-square-foot Gershwin Lofts Retail @ Hollywood for $30.4 million.
Westside
The Westside office vacancy rate increased to 19.2%, up from 18.5% the previous quarter and 14.2% the previous year. Marina del Rey had the highest vacancy rate at 30.9%, West Hollywood had the lowest at 11%. Asking rates for Class A space on the Westside was $5.61 a square foot, down 1 cent from the previous quarter and 2 cents from the previous year. There was 2.1 million square feet of office space under construction, including 711,137 square feet in Culver City and 1.3 million square feet in West L.A. There was negative 186,705 square feet of net absorption on the Westside during the quarter.
Main Events
Century City-based Standard Communities, the housing division of Standard Cos., West Hollywood-based Faring Property Group, California Statewide Communities Development Authority and the city of West Hollywood acquired a multifamily property to be converted to middle-income housing for roughly $100 million. It is known as The Crescent at West Hollywood Apartments.
New York-based Tishman Speyer purchased the Santa Monica Collection, which is comprised of eight development sites spread across roughly 3.1 acres, for an undisclosed sum with plans for a large mixed-use project at the site.
A retail property at the corner of Rodeo Drive and Brighton Way on Rodeo Drive in Beverly Hills received a $38 million loan for the fee simple interest.
In February the American Jewish University announced plans to sell its campus at 15600 Mulholland Drive in Bel Air while expanding its digital and in-person offerings.
Santa Clarita Valley
Santa Clarita Valley’s office vacancy rose to 22.4%, up from 22.1% the previous quarter and 18.7% the previous year. Net absorption was negative 8,936 square feet and there was no office product under construction. Asking rents held steady quarter over quarter and but rose 5 cents year over year to $2.87 a square foot.
Main Events
A multi-tenant industrial building at 26858 Ruether Ave. in Santa Clarita sold for $3.7 million.
LA North Studios leased a 70,550 square-foot industrial property at 28525 Witherspoon Parkway in Valencia. The property is owned by Desert Orchard and Golden Westminster Investments.
A freestanding office building at 28015 Smyth Drive in Valencia in the Highridge Business Park sold for $2.7 million.
San Fernando Valley
The San Fernando Valley’s office vacancy rate fell to 18.6%, down from 18.9% the previous quarter but up from 17.1% the previous year. Rents held steady quarter over quarter but decreased 1 cent year over year to $2.94 a square foot. Net absorption was 80,798 square feet and 309,673 square feet was under construction.
Rexford Industrial Realty Inc. bought the Chatsworth Business Park for $42 million.
Brentwood-based Hudson Pacific Properties Inc. and Blackstone received a $94 million construction loan for the Sunset Glenoaks Studio facility in Sun Valley.
A 380,000-square-foot medical office portfolio with eight properties in the Bay Area and the San Fernando Valley sold for an undisclosed sum.
Tri-Cities
First quarter office vacancies increased in the Tri-Cities submarket of Burbank, Glendale and Pasadena to 16.5%, up from 15.5% the previous quarter and 14.4% the previous year. Negative 274,325 square feet was absorbed in the quarter while 1.4 million square feet was under construction. Rents increased 6 cents quarter over quarter and 15 cents year over year to $3.73 a square foot.
Main Events
The California Statewide Communities Development Authority and BLVD Impact Housing, an affiliate of BLVD Group, purchased a 126-unit property in Glendale known as Towne at Glendale for $79.8 million from Interstate Equities Corp.
An office tower owned by San Francisco-based DivcoWest in Glendale – Glendale Plaza – has received a $145 million loan.
Wilshire Corridor
Wilshire Corridor’s first-quarter office vacancy rate rose to 30%, up from 29.4% the previous quarter and 23.6% the previous year. Negative 78,338 square feet was absorbed into the market and no new office product was under construction. Asking rents fell to $2.56 a square foot, down 35 cents over the previous year.
Main Events
Real estate investment trust CIM Commercial Trust Corp. and a co-investor purchased the largest office building in Echo Park for $51 million.
Culver City-based ABRA Management Inc. purchased a mixed-use asset with 59 luxury residences and 2,646 square feet of retail space on the border of Eagle Rock and Highland Park for $28.7 million.
