Office subleasing picks up in LA, tops new listings in Q3

West LA drives action, chips away at high overall vacancy rate

Los Angeles /
Oct.October 12, 2021 11:20 AM
(Getty, Photo Illustration by The Real Deal)
(Getty, Photo Illustration by The Real Deal)

Firms in Los Angeles are starting to sign more sublease deals, a trend that’s begun to chip away at a stubbornly high overall vacancy rate.

Sublease activity outpaced new listings for offices for the first time since the start of the pandemic, according to a quarterly report from Newmark. Around 81,400 square feet more space was subleased from July through September compared with the second quarter.

Sublet availability ticked down less than a half a percent to 4.3 percent in the third quarter compared with the prior period. The sublease segment currently totals about 9.1 million square feet in Los Angeles.

Activision Blizzard signed the largest sublease deal in the third quarter, taking 87,800 square feet of space for one of its subsidiaries at LPC West’s Pen Factory in Santa Monica.

West Los Angeles had the most sublease space on the market last quarter, with 3.5 million square feet. The area — which spans from Hollywood to Culver City to Marina del Rey — also led the increase in subleasing activity, with 180,000 square feet taken off the market.

Subleasing office space is generally cheaper than signing a lease outright. DirecTV, which is offering more than 500,000 square feet of sublease space in El Segundo, is asking $2.95 per square foot per month, though its former parent company was paying base rents of $3.39 per square foot.

Though subleasing activity offers a positive note on the market, the overall office vacancy rates across Los Angeles County are at a 10-year high.





    Related Articles

    arrow_forward_ios
    Kingsbarn's Jeff Pori and Cruzan’s Dennis Cruzan and with 23332 Mill Creek Drive (Kingsbarn Real Estate Capital, Cruzan, LoopeNet)
    Cruzan sells Laguna Hills office complex to Kingsbarn
    Cruzan sells Laguna Hills office complex to Kingsbarn
    444 South Flower Street (Getty, Joe Collver/CC BY-SA 3.0/via Wikimedia Commons)
    Foreclosure auction for 444 South Flower Street delayed
    Foreclosure auction for 444 South Flower Street delayed
    Newmark's Kevin Shannon, Marcus & Millichap's Jordan Asheghian and Tony Azzi, Stepp Commercial's Travis Traweek and Waterford's John Drachman (Newmark, Marcus & Millichap, Stepp Commercial, Waterford Property Company)
    Brokers tell clients to sell before transfer tax deadline
    Brokers tell clients to sell before transfer tax deadline
    Rising Realty’s Christopher Rising and KW Commercial’s Tony Wood; Park DTLA at 261 South Figueroa Street (Rising Realty, Park DTLA, Getty)
    Cut and run: Ready Capital looks to offload Park DTLA office campus
    Cut and run: Ready Capital looks to offload Park DTLA office campus
    Joel Schreiber and KBS Realty Advisors' Charles Schreiber with 445 South Figueroa Street (Shir Stein, LinkedIn, Union Bank Plaza, Getty)
    KBS sees “no assurance” Joel Schreiber will close Union Bank Plaza purchase
    KBS sees “no assurance” Joel Schreiber will close Union Bank Plaza purchase
    Oracle's Larry Ellison with 2600 Colorado Avenue (Loopnet, Getty)
    Oracle puts Santa Monica office complex up for sale
    Oracle puts Santa Monica office complex up for sale
    Hudson Pacific Properties' Victor Coleman (Hudson Pacific Properties, Getty)
    Hudson Pacific feels brunt of slow office market
    Hudson Pacific feels brunt of slow office market
    From left: Hasbro's Chris Cocks and Worthe Real Estate Group's with 333 West Empire Avenue (Hasbro, The Ocean Avenue Project, Loopnet, Getty)
    Hasbro seeks to sublease office with 80K sf in Burbank
    Hasbro seeks to sublease office with 80K sf in Burbank
    arrow_forward_ios

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

    Loading...