Office vacancy continues upward across LA

More than a quarter of all the office space in Los Angeles County was available for lease or sublease in the first quarter of this year, up nearly a full percentage point from the fourth quarter of 2021, according to a report from Savills.

The latest uptick in availability was largely driven by Farmers Insurance, which put more than 500,000 square feet of office space in the San Fernando Valley neighborhood of Woodland Hills up for sublease in the first quarter. The space, located at 6301 Owensmouth Avenue, was used as Farmers Insurance’s headquarters.

Tenants are continuing to shed office space as they “adjust to a post-pandemic office market” with “the new normal of hybrid workplace and increased flexibility of where employees choose to work,” according to the report.

Companies are also putting more space up for sublease as they look for “newer, fully-amenitized” office projects and more custom space.

Creative Artists Agency, the talent firm, signed the largest deal in the first quarter, taking 400,000 square feet at 1950 Avenue of the Stars in Century City, which is currently under development. CAA will move into the JMB Realty building in 2026.

Tech, entertainment and media companies signed most of the largest office deals in the first quarter. Lionsgate Entertainment extended a lease for about 193,000 square feet of space at 2600 Colorado Avenue in Santa Monica and production firm Company 3 leased 60,000 square feet in Hollywood.

Google also added 53,000 square feet to its sprawling footprint in Playa Vista in the first quarter, leasing space at EJM Equities’ The Bluffs office campus.

Despite some notable lease deals in Santa Monica and Playa Vista, including Nike’s recent 93,000-square-foot addition, these Westside neighborhoods are still seeing high vacancy rates.

Around 32 percent of all office space in Marina del Rey and Playa Vista was available in the first quarter — a small increase from 34 percent in the fourth quarter. Around 22 percent of office space is vacant in Santa Monica.

The San Gabriel Valley was the tightest office market across L.A. County in the first quarter, with a vacancy rate of around 13 percent. That bar was held by Burbank in the fourth quarter of last year, though vacancy jumped from 10 percent then to 14 percent in the first quarter of 2022.