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Partnership. Performance. avisonyoung.com
15.3%Total vacancy rate
$3.04 PSFWeighted average asking
rental rate
Market OverviewSteady job growth continued to contribute to the health of the Los Angeles economy, with the largest job gains seen in education, health care, hospitality, professional services, government, and finance. Specifically, the Los Angeles County unemployment rate fell 60 basis points year over year, from 5.4% February 2016 to 4.8% in February 2017.
Office leasing was bolstered by professional services, finance, media, technology, and health care. However, during the first quarter 2017, a significant amount of office space was given back to the market, over 1M sf: primarily from West LA. This came from relocations and down sizing. To that end, LA County vacancy rose to 15.3% first quarter, increasing 80 basis points from the previous quarter. This trend is expected to continue, as there is over 5M sf of office inventory under construction and renovation in the County of which approximately 15% is pre-leased.
First Quarter 2017 / Office Market Report
Los Angeles
Market Facts
4.8%Los Angeles County unemployment rate
1,054,110 SFNegative net absorption
Photo by Mott Smith
Increased construction of highly amenitized
creative office projects continued to drive
average asking rents higher for another quarter: up approximately 4.3% over last
quarter, to $3.04 psf FSG. Despite having
significant negative net absorption, West Los
Angeles continued to boast the highest
submarket rents, at $4.46 psf, while the next
highest rents are in Downtown Los Angeles,
at $3.24 psf. Downtown Los Angeles vacancy
now closely matches the Hollywood/Mid-
Wilshire submarket, with the highest
vacancies in the County. At the opposite end
of the pricing spectrum, the most affordable
average rent continues to be found in San
Gabriel Valley, at $2.19 psf, while Los Angeles
North follows at $2.31 psf.
Partnership. Performance. avisonyoung.com
Los Angeles First Quarter 2017 / Office Market Report
Market By The Numbers
SubmarketExisting Inventory (SF)
Q1 2017 Vacancy %
Q4 2016 Vacancy %
Q1 2017 Net Absorption (SF)
YTD Net Absorption (SF)
Q1 2017 Completions (SF)
U/C & Renovation (SF)
Weighted Avg Asking Lease Rate
DOWNTOWN 33,582,484 18.3% - Bunker Hill 8,093,972 17.2% - Financial District 19,047,053 20.5% - Greater Downtown 2,723,876 14.1% - South Park 3,717,583 13.9% -
WEST LA 58,386,089 11.4% 418,780 Beverly Hills 6,977,723 13.2% - Brentwood 3,339,045 7.9% - Century City 10,651,831 8.8% - Culver City 3,983,215 11.4% - Marina Del Rey/Venice 6,974,715 15.2% 418,780 Miracle Mile 5,300,964 10.9% - Olympic Corridor 3,070,722 4.6% - Santa Monica 9,361,521 12.9% - West Hollywood 3,009,176 12.4% - West Los Angeles 869,701 19.0% - Westwood 4,847,476 11.8% -
TRI CITIES 23,418,595 13.2% - Arcadia 622,000 1.0% - Burbank 6,889,044 13.1% - Glendale 6,409,491 11.3% - Monrovia 1,139,708 15.5% - Pasadena 8,358,352 15.2% -
SOUTH BAY 33,518,382 16.1% - 190th Street Corridor 3,469,129 26.5% - Central Torrance 4,462,804 10.3% - Downtown Long Beach 5,074,266 16.2% - El Segundo/Beach Cities 11,579,365 9.7% - LAX 4,416,768 35.4% - Long Beach Airport 4,516,050 11.1% -
LA NORTH 31,374,602 13.6% - Central SF Valley 4,840,995 10.6% - Conejo Valley 6,478,926 15.5% - East SF Valley 2,272,559 10.4% - Santa Clarita Valley 2,298,139 16.4% - West SF Valley 15,483,983 13.9% -
SAN GABRIEL VALLEY 10,214,373 14.1% - East San Gabriel Valley 6,527,415 15.5% - West San Gabriel Valley 3,686,958 11.6% -
HOLLYWOOD/MID-WILSHIRE 14,896,554 323,273 Hollywood 4,337,232 18.7% 323,273 Mid-Wilshire 10,559,322 19.0% -
LA COUNTY 205,391,079 742,053 14.5%
18.9%
18.4%15.8%21.1%17.4%12.5%
14.2%13.9%8.6%8.6%
21.9%21.3%17.0%3.5%
13.2%20.0%19.3%15.8%
13.5%1.3%
13.2%10.9%12.8%16.7%
15.6%26.0%10.1%16.0%8.6%
34.8%11.7%
13.7%13.4%14.9%9.5%16.4%13.5%
15.1%17.4%11.2%
18.0%15.7%18.9%
15.3%
(41,225) (41,225)111,245 111,245
(115,557) (115,557)(89,354) (89,354)52,441 52,441
(1,228,402) (1,228,402)(43,245) (43,245)(23,114) (23,114)15,305 15,305(412,535) (412,535)(21,880) (21,880)(322,196) (322,196)33,472 33,472(30,430) (30,430)(227,367) (227,367)(2,704) (2,704)
(193,708) (193,708
(183,125) (183,125)(1,980) (1,980)(1,775) (1,775)23,304 23,30431,094 31,094
(233,768) (233,768)
122,133 122,13319,077 19,07710,858 10,85810,990 10,99084,283 84,28324,600 24,600(27,675) (27,675)
(21,045) (21,045)(131,743) (131,743)25,616 25,61620,334 20,334 1,394 1,39463,354 63,354
(105,677) (105,677)(121,665) (121,665)15,988 15,988
403,231 403,231390,326 390,32612,905 12,905
(1,054,110) (1,054,110)
$3.24- $3.25
372,775 $3.27 1,040,376 $2.851,071,561 $3.16
1,891,565 $4.46 132,450 $5.18
‐ $4.27 ‐ $4.63
1,041,927 $3.26 124,148 $4.76
‐ $3.86 ‐ $3.83
359,143 $5.13 233,897 $4.83
‐ $3.48 ‐ $4.22
20,624 $2.82 ‐ $2.29
20,624 $3.16 ‐ $2.64 ‐ $2.38 ‐ $2.96
116,744 $2.39 ‐ $2.10 ‐ $2.43 ‐ $2.36
116,744 $3.15 ‐ $1.84 ‐ $2.09
116,595 $2.31 20,480 $2.38
‐ $2.27 ‐ $2.48
96,115 $2.47
‐ $2.25
94,000 $2.19 ‐ $2.18
94,000 $2.22
$2.76
36,122$4.13$2.26
5,053,875 $3.04
2,484,712
329,635 329,635
* Revisions to weighted average rent methodology were made effective Q12017; current data reported may not match data reported in previous quarters.
Partnership. Performance. avisonyoung.com
Los Angeles First Quarter 2017 / Office Market Report
Q1 2017 Inventory (SF)
Q1 2017 Vacancy %
Q4 2016 Vacancy %
Q1 2017 Net Absorption(SF)
YTD Net Absorption(SF)
Q1 2017 Completions(SF)
U/C & Renovation(SF)
Weighted Avg Asking Lease Rate
DOWNTOWN 33,582,484 18.3% - Class A 18,291,733 15.3% - Class B 13,421,753 - Class C 1,868,998 -
WEST LA 58,386,089 418,780 Class A 45,482,636 418,780 Class B 11,708,721 9.9% - Class C 1,194,732 5.3% - -
TRI CITIES 23,418,595 - 20,624Class A 16,739,268 - - Class B 6,014,980 - 20,624Class C 664,347 8.4% - -
SOUTH BAY 33,518,382 - Class A 13,397,424 - 116,744 Class B 17,180,903 - Class C 2,940,055 - -
LA NORTH 31,374,602 - 116,595Class A 18,255,077 96,115 Class B 12,046,907 - 20,480Class C 1,072,618 - -
SAN GABRIEL VALLEY 10,214,373 - 94,000
Class A 4,120,835 - - Class B 5,360,041 - 94,000Class C 733,497 - -
HOLLYWOOD/ MID-WILSHIRE 14,896,554 -
Class A 7,020,456 - Class B 6,781,897 - - Class C 1,094,201 - -
LA COUNTY 205,391,079 Class A 123,307,875 Class B 72,515,202 - Class C 9,568,002 - -
18.4%14.6%23.0%25.8%
14.2%15.7%9.8%6.7%
13.5%14.7%9.9%15.8%
15.6%12.9%18.4%11.2%
13.7%14.2%13.0%12.5%
15.1%
10.6%20.3%
6.3%
18.0%
12.4%22.9%22.7%
15.3%14.5%16.8%14.9%
$3.24$3.49$3.19$2.73
$4.30$4.53$4.05$3.22
$2.82$2.96$2.44$2.10
$2.39$2.74$2.19
$1.92
$2.31$2.48$2.17$1.84
$2.19
$2.44$2.13$1.92
$2.76
$3.27$2.41$2.58
$3.04$3.43$2.61$2.30
5,053,8754,053,212 1,000,663
329,635
-
2,090,002 394,710
‐
1,891,565 1,092,215
799,350
123,112 123,11222.3% (89,376) (89,376)21.5% (81,929) (81,929)
11.4% (1,228,402) (1,228,402)
12.0% (1,224,670) (1,224,670) 13,305 13,305
(17,037) (17,037)
13.2% (183,125) (183,125)13.8% (150,793) (150,793)12.1% 17,348 16,820
(49,152) (49,152)
16.1% 122,133 122,13312.5% (65,895) (65,895)20.0% 240,904 240,9049.4% (52,876) (52,876)
13.6% (21,045) (21,045)13.9% (56,327) (56,327)13.3% 28,394 28,39413.1% 6,888 6,888
14.1% (105,677) (105,677)
11.2% 24,015 24,01517.3% (135,891) (135,891)7.2% 6,209 6,209
18.9% 403,231 403,231
13.6% 362,824 362,82423.5% 41,970 41,97022.5% (1,563) (1,563)
14.5% (1,054,110) (1,054,110)13.1% (951,017) (951,017)17.2% 86,340 86,34012.9% (189,433) (189,433)
(41,225) (41,225) 2,484,712
116,744
329,635
* Revisions to weighted average rent methodology were made effective Q1 2017; current data reported may not match data reported in previous quarters.
Los Angeles First Quarter 2017 / Office Market Report
Vacancy Rate
0.0%
2.0%
4.0%
6.0%
8.0%
2011 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q
Asking Rent
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2011 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q
Net Absorption
-2,500,000-2,000,000-1,500,000-1,000,000
-500,0000
500,0001,000,0001,500,0002,000,0002,500,000
2011 2012 2013 2014 2015 2016
Tenant Type Address Submarket SF
MOLINA HEALTHCARE NEW 222 W 6TH ST, SAN PEDRO SOUTH BAY 99,343
SNAPCHAT NEW 3340 OCEAN PARK BLVD, SANTA MONICA WEST LA 88,432
WILSHIRE & ASSOCIATES NEW 1299 OCEAN AVE, SANTA MONICA WEST LA 61,792
AMAZON WEST LA 60,772
HEALTHCARE PARTNERS
NEW 2425 OCEAN PARK BLVD, SANTA MONICA
NEW 1120 W WASHINGTON BLVD, LOS ANGELES DOWNTOWN LA 60,000
Top Lease
Address Buyer Seller Price SF P/SF
655 N CENTRAL AVE, GLENDALE DIVCO WEST
1537 NORFOLK ST, LOS ANGELES USC
5340 ALLA RD, LOS ANGELES JLLIPT
611 N BRAND BLVD, GLENDALE ONNI GROUP
2411 W OLIVE AVE, BURBANK MENLO EQUITIES
PGIM REAL ESTATE
Top Sales
Address Developer SF Completion
757 S ALAMEDA ST, LOS ANGELES ATLAS CAPITAL GROUP 425,131 Q1 2018
900 WILSHIRE BLVD, LOS ANGELES KOREAN AIRLINES/AC MARTIN PARTNERS 372,775 Q2 2017
10000 W WASHINGTON BLVD, CULVER CITY LBA REALTY 363,000 Q4 2017
700 CORPORATE POINTE, CULVER CITY IDS REAL ESTATE GROUP 278,247 Q2 2017
801 S BROADWAY, LOS ANGELES WATERBRIDGE CAPTIAL 955,561 Q3 2017
Under Construction/Renovation
Partnership. Performance. avisonyoung.com
DOHENY EYE INSTITUTE
PACSHORE PARTNERS
LNR PARTNERS, LLC
TIER REIT, INC.
$179,000,000 547,302 $327
$110,000,000 150,608 $730
$110,000,000 130,150 $843
$83,000,000 396,000 $210
$52,500,000 117,859 $445
avisonyoung.com
© 2017 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.
A Growing, Multinational Presence First Quarter 2017 / Office Market Report
Contact Information
Los Angeles - Downtown 555 S Flower St, Ste 3200 Los Angeles, CA 90071 Primary Contact: Ted Simpson [email protected] 213.935.7430
Los Angeles - West 10940 Wilshire Blvd, Ste 2100Los Angeles, CA 90024 Primary Contact: Jonathan Larsen [email protected] 213.471.1069
Los Angeles - North 6711 Forest Lawn Dr Los Angeles, CA 90068 Primary Contact: Mark Evanoff [email protected] 323.851.6666
Regional Managing Director:Chris Cooper - Corporate555 S Flower St, Ste 3200Los Angeles, CA 90071 [email protected]
Orange County - Irvine 2030 Main Street, Ste 150 Irvine, CA 92614 Primary Contact: Stan Yoshihara [email protected]
San Diego - La Jolla 4225 Executive Sqr, Ste 600 La Jolla, CA 92037 Primary Contact: Jerry Keeney [email protected]
Los Angeles - Santa Monica301 Arizona Ave, Ste 303 Santa Monica, CA 90401 Primary Contact: Randy Starr [email protected] 310.899.1800
A Growing, Multinational Presence
avisonyoung.com ©2016 Avison Young (Canada) Inc. All rights reserved.
Partnership. Performance.
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.
Avison Young at a Glance
Founded: 1978 Total Real Estate Professionals: 2,400
Offices: 79Brokerage Professionals: 900+
Property Under Management: 100 million sf
Transaction Services- Tenant representation, lease
acquisition and disposition- Investment acquisition
and disposition for ownersand occupiers
- Landlord representation—all property types—office,industrial, retail, build-to-suit,land and multi-family
Consulting & Advisory Services- Portfolio review and analysis- Valuation and appraisal- Benchmarking- Transaction management- Asset rationalization- Mergers and acquisitions- Workplace solutions- Acquisitions and dispositions- Property tax services
Debt Capital Services- Permanent & construction- Structured finance- Portfolio mark to market- Mezzanine & bridge
Enterprise Solutions- Integrated services coordination- Transaction management- Optimization strategies- Portfolio lease administration- Project coordination and
reporting
Management Services- Project management- Property and operations review- Property/facility management- Tenant relations- Financial reporting- Lease administration- Operations consulting- Asset management- Portfolio management
Investment Management- Acquisitions- Asset management- Portfolio strategy- Capital repositioning
GREENVILLE
ATLANTA
EDMONTON
CALGARY
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PHILADELPHIANEW JERSEYSUBURBAN MARYLANDWASHINGTON, DCTYSONS CORNER
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Research Manager:Arty Maharajh555 S Flower St, Ste 3200 Los Angeles, CA 90071 [email protected]