The Central L.A. market rose from negative absorption last quarter to its highest total positive absorption since the second quarter of 2006, according to a report from Colliers International. But the delivery of new properties in Hollywood that weren’t pre-leased brought the market’s vacancy up 100 basis points to 20.8 percent from 19.8 percent in the third quarter.
Central L.A.’s Hollywood submarket, which has 47 office buildings that total 3.6 million square feet, had an active fourth quarter. There was 383,500 square feet of new construction completed, and there was 915,000 underway. The new projects, sans tenants, drove the total vacancy rate up to 17.8 percent, a sharp increase from 10.8 percent last quarter.
Asking rates at the newer buildings in the area drove the average asking rent up by 68 cents, to $3.97 a square foot a month, well above the Central L.A. average of $2.38.
The Hollywood submarket saw 30,100 square feet of leasing activity and 104,600 square feet of net absorption in the fourth quarter.