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Los Angeles

Office landlords with new product are undeterred by rising vacancy rates: report

Rents at Pen Factory are $5 psf a month

The Wilshire Grand in Downtown Los Angeles (Credit: Wilshire Grand Center)
The Wilshire Grand in Downtown Los Angeles (Credit: Wilshire Grand Center)

Ducking the laws of supply and demand, the price of renting an office space in Los Angeles rose in the third quarter as more space became available, the Los Angeles Times reported.

Rents primarily rose due to the completion of premium office buildings, such as the Wilshire Grand in Downtown Los Angeles and the Pen Factory in Santa Monica, which are demanding top dollar.

The overall average rent in the third quarter was $3.32 per square foot per month, according to CBRE. That’s up from $3.19 in the previous quarter and $3.08 in the third quarter of 2016.

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Rents at the Pen Factory — a reconstructed former Papermate manufacturing plant — tally at $5 per square foot per month. Over in Downtown, the tallest tower in the West is asking $4.25 a square foot.

Santa Monica topped the list with the most expensive office rates. Landlords there are asking for more than $6 per square foot.

Nearly 1.7 million square feet of new office space entered the market this year, propelling the third quarter vacancy rate up to 14.4 percent from 13.7 in the previous quarter. The vacancy rate clocked in at 13.3 percent in the same period a year earlier. [LAT] – Natalie Hoberman