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
    Riot Games to lease all of West Edge offices
    Riot Games to lease all of West Edge offices
    Riot Games to lease all of West Edge offices
    Wings to warehouse for Raytheon-leased office in Brea
    Wings to warehouse for Raytheon-leased office in Brea
    Wings to warehouse for Raytheon-leased office in Brea
    Takeoff! Rocket startup signs for 100K sf in El Segundo
    Takeoff! Rocket startup signs for 100K sf in El Segundo
    Takeoff! Rocket startup signs for 100K sf in El Segundo
    Going up: Mizrahi-Tefahot Bank shifts U.S. office to LA’s Bunker Hill
    Going up: Mizrahi-Tefahot Bank shifts U.S. office to LA’s Bunker Hill
    Going up: Mizrahi-Tefahot Bank shifts U.S. office to LA’s Bunker Hill
    $90.5M for Burbank office tower
    $90.5M for Burbank office tower
    $90.5M for Burbank office tower
    Value-add eyed in latest deal for Burbank media space
    Value-add eyed in latest deal for Burbank media space
    Value-add eyed in latest deal for Burbank media space
    Vietnam-based EV brand picks Playa Vista for US headquarters
    Vietnam-based EV brand picks Playa Vista for US headquarters
    Vietnam-based EV brand picks Playa Vista for US headquarters
    Armata Pharmaceuticals CEO Brian Varnum and Montana Avenue Capital Partners Managing Partner Jeremy Rogers with 5005 McConnell Ave (Montana, Armata)
    Pharma outfit sees R&D in 56K sf HQ near Marina del Rey
    Pharma outfit sees R&D in 56K sf HQ near Marina del Rey
    arrow_forward_ios

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

    Loading...