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
Andrew McDonald and At Mateo in the Arts District

Cushman’s West Coast chief talks expansion, DTLA market, the death of the starving baby broker & more

3339 Exposition Blvd. and Asher Luzzatto

Luzzatto Co. assembling creative office hub in West Adams

Jason Illoulian and the Cemex plant

Faring makes $30M assemblage play on WeHo/LA border

From left: Nuveen CEO Vijay Advani, Graymark founder/CEO Brian Hecktman

Graymark, Nuveen pay $97M for El Segundo creative office

Hudson Pacific Properties CEO Victor Coleman and the Westside Pavilion (Credit: Google Maps)

Hudson Pacific wants full control of Google-leased One Westside; not sweating WeWork

From left: Owen Fileti, and Felipe Gomez

Startup brokerage HelloOffice expands to LA, hires former top LA Realty broker

La Mirada industrial building

Clarion pays $77M for La Mirada industrial project

510 Park Avenue and CEO of Monster Beverage Rodney Sacks

Monster Beverage affiliate guzzles down industrial project in San Fernando

arrow_forward_ios
Loading...