Tech and media companies were boon for LA office market in Q4: CBRE

Netflix and Amazon Studios leased nearly 2M sf at the end of 2018

TRD LOS ANGELES /
Jan.January 18, 2019 10:15 AM
Netflix CEO Reed Hastings and a rendering of the City of Angels (Credit: Netflix and Kilroy)

The Los Angeles office market ended 2018 on a strong note, driven by big deals from tech and media companies in Hollywood and the Westside.

“Major content creators” including Netflix and Amazon Studios leased upwards of 1.7 million square feet in the fourth quarter, according to CBRE’s Greater L.A. Q4 report. Netflix signed the largest deal, starting with a 328,000-square-foot lease at Hudson Pacific Properties’ project in Hollywood in October. A month later it inked a 355,000-square-foot lease at Kilroy Realty’s Academy on Vine. The streaming service giant renewed another 418,000 square feet in the fourth quarter as well.

Development was also strong in the fourth quarter. There was 3.4 million square feet of office space under construction, the most since the beginning of 2008.

Overall, vacancy in L.A. County essentially remained the same, going from 14.2 percent in the third quarter to 14.1 percent in the fourth, according to CBRE. West L.A. recorded a vacancy rate of 11.4 percent while Century City’s vacancy rate was 7.1 percent, showing its recent surge in popularity.

CBRE predicted that demand in the West L.A. and Hollywood markets would drive tenants to Burbank, El Segundo, or the Arts District, in search of Class A and creative office space.

Tenants are also scooping up space at new construction buildings, with pre-leasing commitments at 37 percent, according to the report.

CBRE expects office vacancy to steadily drop through 2019 because net absorption this year matched average gains over the last five years.


Related Articles

arrow_forward_ios
DTLA and Century City (Credit: Basil D Soufi via Wikipedia, and iStock)

Office leasing in Q2 was a fraction of what it was a year ago

Office leasing in Q2 was a fraction of what it was a year ago
Brookfield Asset Management CEO Bruce Flatt and Woodridge CEO Michael Rosenfeld with 101 S. Marengo Avenue, and a rendering of the building (Credit: Google Maps)

CRE investment sales in LA sank like a stone in May

CRE investment sales in LA sank like a stone in May
First District Supervisor Hilda Solis (Credit: Rebecca Sapp/Getty Images)

LA County select reopening target date for restaurants and retailers

LA County select reopening target date for restaurants and retailers
City National Plaza, CommonWealth CEO Brett Munger Calpers CEO Marcie Frost

CalPERS venture snags $550M refi on City National Plaza tower

CalPERS venture snags $550M refi on City National Plaza tower
Woodridge CEO Michael Rosenfeld with 101 S. Marengo Avenue, and a rendering of the building (Credit: Google Maps)

Windowless but not buyerless: Woodridge sells distinctive Pasadena office complex

Windowless but not buyerless: Woodridge sells distinctive Pasadena office complex
Shaul Kuba and the now-former redevelopment plan (Credit: Department of City Planning)

CIM to buy Baldwin Hills Crenshaw Plaza, scrap resi redevelopment plan

CIM to buy Baldwin Hills Crenshaw Plaza, scrap resi redevelopment plan
Gavin Newsom (Credit: Emma McIntyre/Getty Images)

Retailers and some offices could open first in Newsom’s reopening plan. But there’s a catch

Retailers and some offices could open first in Newsom’s reopening plan. But there’s a catch
Los Angeles office leasing dropped sharply in the first quarter

LA office leasing plummets in Q1 with more trouble ahead: report

LA office leasing plummets in Q1 with more trouble ahead: report
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...