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LA office market vacancy rises to 15% in Q3
Leasing was worst in over a decade, according to CBRE report
The pandemic continued to batter the Los Angeles office market in the third quarter.
Overall vacancy climbed to 15 percent from 13.7 percent from the second quarter and 12.6 year-over-year, according to a CBRE report cited by the Los Angeles Times.
Across the city, office leasing was as bad as it’s been since 2009, the worst year of the Great Recession, according to the report.
Overall occupancy fell by a staggering 2.7 million square feet, compounding a drop of 1.9 million square feet in the second quarter.
The plummeting demand still has not prompted landlords to lower rents just yet. Asking rents for Class A space hit $3.97 per square foot, up from $3.88 per square foot in the second quarter, and $3.71 per square foot year-over-year, the report noted.
An increasing number of tenants continued to offer up their space for sublease. Around 2 million square feet of space has come up for sublease since the beginning of the pandemic, about twice the amount since July.
A lot of that space is available for short-term lease periods, CBRE’s Todd Doney said, according to the Times.
There was one bright spot. The third quarter saw the biggest lease of the year when Netflix inked a deal for 171,000 square feet at Burbank Empire Center for its first dedicated animation studio. [LAT] — Dennis Lynch