Monday, April 6, 2009

Los Angeles Office Market (Somewhat) Stable

Los Angeles Office TowerIn an economic environment which skews at least 99% to the negative, there is good news to report in the Los Angeles County office market. In 2008, the area outperformed all other SoCal regions in terms of office occupancy (12% vacancy by the end of 2008) and was nearly on par with the number of leases over 20,000 sq ft that were signed in 2007. We’ll take the smidgen of good news.

Despite the downturn, the pace of new leases or office expansions in L.A. County barely slowed last year, according to the Los Angeles County Economic Development Corp.

In 2008, 98 companies signed leases of at least 20,000 square feet or $1 million in annual value in L.A. County, down from 100 such leases in 2007. The numbers include new leases or expansions of existing leases.

The total square footage of these leases rose 13 percent in 2008 to 7.6 million square feet.

Office vacancy rates rose from 9.7 percent at the end of 2007 to 12 at the end of 2008, meaning that the space coming onto the market exceeded space being absorbed in new or expanded leases.

Nonetheless, Los Angeles significantly outperformed the rest of the Southern California region, which saw a 14 percent reduction in the number of major expansion leases signed and a 25 percent drop in the total square foot leased, led by major drops in Orange County and the Inland Empire. [Los Angeles Business Journal]