Vacancy in SaMo’s office market dropped nearly 5.6% in one quarter

Report shows city's strongest quarter ever in terms of net absorption

Feb.February 23, 2017 05:14 PM
Santa Monica Pier, Oracle co-chief executives Safra Catz and Mark Hurd (Getty Images/Oracle)

The tail end of 2016 was ripe with Santa Monica office news, from Oracle’s purchase of 2700 Colorado to reports that Snapchat was looking to take a massive space at Santa Monica Business Park. Now, fourth quarter data is illuminating the full scope of the change in the submarket, where vacancy rates dropped to the lowest levels since 2015.

Demand from tech and media firms helped push vacancy down from 15.1 percent in the third quarter to 9.5 percent in the fourth quarter of last year, according to a report from CBRE.

The area saw a positive 537,513 square feet of net absorption in the fourth quarter. Meanwhile, with less than 1 million square feet of vacant space left in the city, rents increased, climbing 3.4 percent from the third quarter to the fourth quarter.

Rents are not likely, however, to see endless flight. Historically, when lease rates are more than 13.5 percent higher than the West Los Angeles average, absorption becomes negative over time.

But for now, Santa Monica’s office market is riding high. Developers have also taken notice with projects such as the two-building Colorado Creative Studios project at 2834 Colorado totaling 200,000 square feet of office space and Pen Factory at 2710 Olympic Boulevard offering 222,000 square feet of creative office space, The Real Deal reported.

Related Articles

510 Park Avenue and CEO of Monster Beverage Rodney Sacks

Monster Beverage affiliate guzzles down industrial project in San Fernando

The 5 priciest residential sales

Here are the 5 priciest resi sales in LA County last week

Clockwise from top left: 1155 Angelo Drive, 1116 Laurel Way, 613 N. Sierra Drive, 32453 Pacific Coast Highway and 705 N. Arden Drive (Credit: Redfin)

Beverly Hills dominates list of top resi sales in LA County last week

Lightstone’s Eugene Rozovsky, Neil Shekhter and a rendering of 1650 Lincoln Boulevard

Lightstone provides $44M loan to Shekhter-owned WS Communities

Pierce Brosnan and his new home in Santa Monica

“The world is not enough,” but for one former James Bond this Santa Monica pad is

Witkoff Group’s Steve Witkoff and a rendering of the project at 500 Broadway

Witkoff Group snags construction loan for Santa Monica luxury development

Universal Music Group CEO Lucian Grainge and a rendering of Colorado Campus Building B

Universal Music Group is expanding footprint at Colorado Campus office complex: sources

Starwood Capital Group CEO Barry Sternlicht and Lantana campus (Credit: Getty Images and Ehrlich Yanai Rhee Chaney Architects)

Starwood Capital set to buy part of Lantana office campus for $220M: sources