Los Angeles Market Facts 4.7 Los Angeles County unemployment rate 1,560,200 SF Positive net absorption 14.1 Total vacancy rate $3.14 PSF Weighted average asking rental rate Market Overview The Los Angeles County unemployment rate was recorded at 4.7 in December 2016, down from 5.7 in December 2015. Steady job growth has been a major contributor to the health of the Los Angeles County economy overall, with the largest job gains seen in finance, government, education, and health services. The driving force behind the increase in office leasing activity in the county, as of year-end 2016, continues to be office occupants in finance, media, and technology. A positive net absorption of 1,560,200 SF was seen in the fourth quarter of 2016, bringing year-to-date net absorption to 3,160,873 SF. contracted further to 14.1 by the end of the fourth quarter, dropping eighty basis points from the previous quarter. The downward trend in vacancy is expected to continue well in to 2017, and may slightly slow in pace as newly constructed development comes online. There is currently more than 2.5 million square feet of office inventory under construction in the county. As of year-end 2016, demand has driven average asking rents higher for another quarter, to $3.14 psf on a full service gross basis, up approximately twenty basis points from the previous quarter, for the county. The highest submarket rents were found in West LA, with $4.42 psf, while the next highest rents were found in Downtown LA, at $3.30 psf. Between these two submarkets, West LA is experiencing the tightest vacancy rates in the county, while Downtown is now matching the Hollywood/Mid Wilshire submarket with the highest vacancies in the county. At the opposite end of the pricing spectrum, the most affordable rents continue to be found in San Gabriel Valley, at psf, while South Bay follows at $2.36 psf. Photo by Mott Smith
Market By The Numbers Submarket Existing Inventory Q3 2016 Net YTD Net DOWNTOWN 33,480,846 18.5 18.3 (67,700) 334,225 - Bunker Hill 8,093,972 17.2 17.7 41,900 353,135 - Financial District 19,047,053 20.5 19.6 (157,200) (175,859) - Greater Downtown 2,723,876 14.1 14.3 5,300 52,281 - South Park 3,615,945 14.1 15.2 42,300 104,668 - Completions Under Construction * Weighted Avg Asking Lease Rate 1,176,058 $3.30 $3.36 356,141 $3.33 819,917 $2.97 $3.25 WEST LA 58,287,507 10.8 11.7 541,000 582,231 - Beverly Hills 6,954,069 12.8 11.6 (83,700) (317,656) - Brentwood 3,339,045 7.9 8.7 28,100 1,935 - Century City 10,661,857 8.9 11.4 260,900 304,980 - Culver City 3,988,279 10.7 9.9 (29,800) 115,482 - Marina Del Rey/Venice 6,579,867 12.9 11.6 (85,000) 143,138 - Miracle Mile 5,387,656 10.1 10.9 38,900 134,449 - Olympic Corridor 3,073,857 4.4 2.6 (54,600) (46,643) - Santa Monica 9,572,802 11.6 16.1 431,900 110,656 - West Hollywood 3,009,242 12.4 13.5 32,900 162,360 - West Los Angeles 868,524 19.3 20.4 9,100 (27,344) - Westwood 4,852,309 11.8 11.7 (7,700) 874 - TRI CITIES 23,459,363 11.8 14.3 589,300 660,713 - Arcadia 622,000 1.0 1.7 4,800 4,762 - Burbank 6,832,278 11.3 15.6 298,300 214,229 - Glendale 6,374,971 11.2 13.3 133,100 105,833 - Monrovia 1,139,708 13.4 17.0 40,500 190,372 - Pasadena 8,490,406 13.1 14.4 112,600 145,517 - SOUTH BAY 33,580,466 15.7 16.4 238,800 737,755-190th Street Corridor 3,487,239 26.7 25.1 (58,500) (190,032) - Central Torrance 4,460,943 10.3 10.6 15,500 90,958 - Downtown Long Beach 5,074,779 16.3 17.3 49,800 156,691 - El Segundo/Beach Cities 11,632,036 8.5 10.0 172,800 445,778 - LAX 4,416,768 35.1 35.4 11,600 105,275 - Long Beach Airport/ 4,508,701 11.0 12.1 47,600 129,085 - LA NORTH 31,380,361 13.7 13.8 33,300 321,842 - Central SF Valley 4,845,878 10.2 9.4 (42,300) 43,985 - Conejo Valley 6,475,526 15.7 16.2 29,200 (28,865) - East SF Valley 2,280,218 10.4 10.3 (2,600) 47,869 - Santa Clarita Valley 2,298,139 16.4 16.7 6,900 42,235 - West SF Valley 15,480,600 14.0 14.2 42,100 216,618-815,382 $4.42 $5.08 $4.21 $4.76 $3.24 493,382 $3.88 $3.91 $3.82 222,000 $5.15 100,000 $4.69 $3.42 $4.33 $3.00 $2.28 $3.23 $2.66 $2.60 $3.16 101,874 $2.36 $2.10 $2.60 $2.37 101,874 $3.07 $1.76 $2.17 $2.42 $2.54 $2.37 $2.58 $2.49 $2.38 SAN GABRIEL VALLEY 10,255,454 13.7 12.2 (154,300) (89,831) - East San Gabriel Valley 6,569,770 14.8 12.2 (169,900) (151,790) - West San Gabriel Valley 3,685,684 11.6 12.1 15,600 61,959 - HOLLYWOOD/MID WILSHIRE 14,572,683 18.6 21.2 379,800 613,938 - Hollywood 4,013,361 17.4 24.1 260,800 414,314 - Mid-Wilshire 10,559,322 19.0 20.1 119,000 199,624 - $2.75 $4.22 $2.16 LA COUNTY 205,016,680 14.1 14.9 1,560,200 3,160,873-2,532,178 $3.14 * Revisions to weighted average rent methodology were made effective ; current data reported may not match data reported in previous quarters.
Inventory Q3 2016 Net YTD Net Completions Under Construction DOWNTOWN 33,480,846 18.5 18.3 (67,700) 334,225-1,176,058 Class A 18,251,773 15.3 15.3 (1,700) 353,551-356,141 Class B 13,383,929 22.4 21.7 (84,500) (39,083) - 819,917 Class C 1,845,144 21.5 22.5 18,500 19,757 - WEST LA 58,287,507 10.8 11.7 541,000 582,231-815,382 Class A 45,301,996 11.3 12.9 691,200 681,100-593,382 Class B 11,753,316 9.3 8.2 (128,800) (77,723) - 222,000 Class C 1,232,195 4.6 2.9 (21,400) (21,146) - - TRI CITIES 23,459,363 11.8 14.3 589,300 660,713 - - Class A 16,646,201 12.7 14.0 225,400 328,463 - - Class B 6,148,815 9.7 15.8 371,200 328,283 - - Class C 664,347 8.4 7.3 (7,300) 3,967 - - SOUTH BAY 33,580,466 15.7 16.4 238,800 737,755-101,874 Class A 13,395,920 12.2 13.4 157,600 243,400 - - Class B 17,250,555 19.4 19.7 60,300 422,934-101,874 Class C 2,933,991 9.3 10.0 20,900 71,421 - - LA NORTH 31,380,361 13.7 13.8 33,300 321,842 - - Class A 18,267,348 14.0 14.0 (7,500) 153,387 - Class B 12,039,848 13.4 13.6 21,000 160,312 - - Class C 1,073,165 11.4 13.4 19,800 8,143 - - SAN GABRIEL 10,255,454 13.7 12.2 (154,300) (89,831) - - VALLEY Class A 4,110,082 11.3 12.0 29,800 (2,729) - - Class B 5,414,779 16.4 13.1 (179,500) (85,063) - - Class C 730,593 7.2 6.6 (4,600) (2,039) - - HOLLYWOOD/ MID WILSHIRE 14,572,683 18.6 21.2 379,800 613,938 - Class A 6,696,585 12.8 17.7 312,300 432,083 - Class B 6,781,897 23.5 24.1 39,300 155,965 - - Class C 1,094,201 22.5 25.1 28,200 25,890 - - LA COUNTY 205,016,680 14.1 14.9 1,560,200 3,160,873 2,532,178 Class A 122,669,905 12.7 13.8 1,407,100 2,189,255 1,388,387 Class B 72,773,139 16.7 16.8 99,000 865,625-1,143,791 Class C 9,573,636 12.6 13.2 54,100 105,993 - - * Revisions to weighted average rent methodology were made effective ; current data reported may not match data reported in previous quarters. * Weighted Avg Asking Lease Rate $3.30 $3.51 $3.20 $2.78 $4.42 $4.46 $4.19 $4.15 $3.00 $3.08 $2.70 $2.43 $2.36 $2.78 $2.10 $2.21 $2.42 $2.54 $2.11 $2.42 $2.20 $2.14 $2.75 $3.35 $2.47 $2.48 $3.14 $3.53 $2.67 $2.56
Rate Asking Rent Net 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2011 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2011 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0-500,000-1,000,000-1,500,000-2,000,000-2,500,000 2011 2012 2013 2014 2015 2016 Top Lease Tenant Type Address Submarket SF WARNER MUSIC GROUP CORP. NEW 777 S SANTA FE AVE, LOS ANGELES DOWNTOWN 257,028 CITY NATIONAL BANK NEW 350 S GRAND AVE, LOS ANGELES DOWNTOWN 241,639 KITE PHARMA NEW 2400 BROADWAY, SANTA MONICA WEST LA 159,310 ENTERTAINMENT PARTNERS NEW 2950 N HOLLYWOOD WAY, BURBANK TRI CITIES 125,573 FANDANGO NEW 407 N MAPLE DR, BEVERLY HILLS WEST LA 97,150 Top Sales Address Buyer Seller Price SF P/SF 12121-12818 BLUFF CREEK, PLAYA VISTA EDWARD J MINSKOFF EQT JPMORGAN CHASE BANK $413,000,000 500,943 $824 LANTANA ENTERTAINMENT MEDIA CAMPUS BRIGHTSTONE CAPITAL PRT JAMESTOWN LP $403,000,000 482,377 $835 2600-2800 COLORADO, SANTA MONICA ORACLE CORPORATION WORTHE REAL ESTATE GRP $367,647,900 315,346 $1,166 CITIGROUP CENTER, DOWNTOWN LA CORETRUST CAPITAL PRT LLC HINES $336,000,000 891,056 $377 6500 WILSHIRE BLVD, MIRACLE MILE CEDARS-SINAI MED CTR LINCOLN PROPERTY CO $295,000,000 456,679 $646 Under Construction Address Developer SF Completion 801 S BROADWAY, LOS ANGELES WATERBRIDGE CAPTIAL 955,561 Q3 2017 12105 & 12126 W. WATERFRONT DR, LOS ANGELES TISHMAN SPEYER 493,400 900 WILSHIRE BLVD, LOS ANGELES KOREAN AIRLINES/AC MARTIN PARTNERS 370,041 Q2 2017 5808 W SUNSET BLVD, LOS ANGELES HUDSON PACIFIC PROPERTIES, INC. 323,273 Q1 2017 963 E 4TH ST, LOS ANGELES HUDSON PACIFIC PROPERTIES, INC. 150,000
A Growing, Multinational Presence Avison Young at a Glance Founded: 1978 Total Real Estate Professionals: 2,400 Offices: 79 Brokerage Professionals: 900+ Property Under Management: 100 million sf Avison Young is the world s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,400 real estate professionals in 79 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multi-family properties. EDMONTON CALGARY SAN FRANCISCO OAKLAND SAN MATEO VANCOUVER LETHBRIDGE REGINA PITTSBURGH CLEVELAND DETROIT COLUMBUS SACRAMENTO MINNEAPOLIS CHICAGO (2) RENO DENVER ST. LOUIS LAS VEGAS INDIANAPOLIS PHOENIX NASHVILLE DALLAS MEMPHIS HOUSTON AUSTIN KNOXVILLE SAN ANTONIO TAMPA LOS ANGELES (4) ORANGE COUNTY SAN DIEGO WINNIPEG ORLANDO MEXICO CITY TORONTO (2) TORONTO NORTH TORONTO WEST WATERLOO REGION OTTAWA MONTREAL JACKSONVILLE WEST PALM BEACH BOCA RATON FORT LAUDERDALE MIAMI QUEBEC CITY MONCTON HALIFAX BOSTON HARTFORD FAIRFIELD/WESTCHESTER LONG ISLAND NEW YORK CITY PHILADELPHIA NEW JERSEY SUBURBAN MARYLAND WASHINGTON, DC TYSONS CORNER RALEIGH-DURHAM (2) CHARLOTTE GREENVILLE CHARLESTON ATLANTA COVENTRY LONDON (2) THAMES VALLEY HAMBURG BERLIN DUESSELDORF FRANKFURT MUNICH Transaction Services Consulting & Advisory Services Management Services Enterprise Solutions Contact Information Los Angeles - Downtown 555 S Flower St, Ste 3200 Los Angeles, CA 90071 Primary Contact: Ted Simpson ted.simpson@ 213.935.7430 Los Angeles - West 10940 Wilshire Blvd, Ste 2100 Los Angeles, CA 90024 Primary Contact: Jonathan Larsen jonathan.larsen@ 213.471.1069 Los Angeles - North 6711 Forest Lawn Dr Los Angeles, CA 90068 Primary Contact: Mark Evanoff mark.evanoff@ 323.851.6666 Regional Managing Director: Chris Cooper - Corporate 555 S Flower St, Ste 3200 Los Angeles, CA 90071 chris.cooper@ 213.935.7435 Orange County - Irvine 2030 Main Street, Ste 150 Irvine, CA 92614 Primary Contact: Stan Yoshihara stan.yoshihara@ 949.757.1190 San Diego - La Jolla 4225 Executive Sqr, Ste 600 La Jolla, CA 92037 Primary Contact: Jerry Keeney jerry.keeney@ 858.201.7070 Los Angeles - Santa Monica 301 Arizona Ave, Ste 303 Santa Monica, CA 90401 Primary Contact: Randy Starr randy.starr@ 310.899.1800 2016 Avison Young [Southern California, Ltd]. All rights reserved. E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young.