Los Angeles has about 1.73 million square feet of new office space expected to be delivered in 2018, according to a new study by Commercial Cafe. That places the city at No. 10 on the blog’s ranking of the top 50 markets for new office space next year.
The eight projects coming down the pike will add to the 98.4 million of existing office space already found in the city. The Hercules Campus at 5865 South Campus Center Drive in Playa Vista will deliver about 525,000 square feet — the largest of any project expected to be completed in 2018. Last year, The Real Deal first reported that Google will be exclusively leasing the entire “Spruce Goose” hangar, owned by Ratkovich Company.
Among the other projects set to boost the inventory in the region are Waterbridge Capital’s 400,000-square-foot Broadway Trade Center at 801 South Broadway, Rising Realty Partners’ 320-square-foot Trust Building at 433 South Spring Street and the eye-catching, 170,000-square-foot (W)rapper Tower at 5790 West Jefferson Boulevard.
The Santa Fe Business Center, the Maxwell Coffee Building redevelopment, 5500 West Jefferson and Downtown West Medical Offices will also be completed in 2018. Each is slated to add less than 100,000 square feet of office space.
Construction may be booming in Los Angeles, but some industry experts have been questioning whether there may be too much office space entering the market. The vacancy rate in the county rose to 14.4 percent in the third quarter of 2017, up 3.5 percent from the prior quarter, according to a report by CBRE. The numbers are even more grim in Downtown Los Angeles, where construction seems to be clustered. As of October, the neighborhood had an 18.2 percent vacancy rate, according to data from the Downtown Center Business Improvement District.
Nationally, New York City ranked No.1 on Commercial Cafe’s list yet again, with over 6.7 million square feet of new construction expected to be delivered in 2018. San Francisco followed with an estimated 4.6 million square feet, which would represent a 6 percent increase to its 82.7 million square feet of existing inventory. Rounding out the top five were Washington, D.C., Cupertino, California, and Philadelphia.