With its vacancy rate hitting a record 20 percent during the third quarter, Los Angeles’ office market reported subdued numbers in 2022, the only exception being a single lease in an under-construction tower in Century City.
A list of largest leases in the market shows a diverse mix of tenants closing major deals in a slowdown market. The top transaction for the year involved talent management firm Creative Artists Agency, which closed a 400,000-square-foot lease at a planned 37-story tower at 1950 Avenue of the Stars. Other firms that closed top office leases in L.A. County include online retailer Amazon.com, clinical laboratory firm Quest Diagnostics, entertainment company Lionsgate and clothing retailer Forever 21.
The data shows that the top tier of Los Angeles’ office market is very uneven. Aside from the Creative Artists Agency and Amazon deals, no other lease transaction went over 200,000 square feet. This level of disparity is similar to figures from 2020, during the early part of the pandemic. That year, the largest deal in the county was The Walt Disney Company’s 425,000-square-foot lease at 3800 West Alameda Avenue in Burbank. The second biggest transaction in the ranking at that time was advertising agency Rubin Postaer and Associates’ 187,000-square-foot lease at 2525 Colorado Avenue in Santa Monica.
Overall, the top tier of Los Angeles’ office market performed worse compared to the previous year. In 2022, the top five deals totaled just 1.16 million square feet. The figure is lower than the 1.23 million square feet from the previous year.
Here are Los Angeles’ largest office leases for 2022, based on data from brokerage firms Newmark and CBRE.
1. 1950 Avenue of the Stars | Creative Artists Agency | 400K sf
Talent management company Creative Artists Agency signed a deal to move its headquarters into JMB Realty’s Century City tower last January.
CAA announced the deal at the time but did not disclose how much square footage was involved. The transaction came shortly after the firm announced a $750 million acquisition of rival ICM Partners.
CAA, which is currently located across the street at 2000 Avenue of the Stars, plans to move into the new 37-story tower once the building is completed in 2026.
2. 1620 26th Street | Amazon | 208K sf
Amazon agreed to lease a portion of the Water Garden in Santa Monica, reportedly the largest Westside office campus north of Interstate 10, in May.
The transaction was part of a package of three deals that the online retailer closed in Southern California at the time. That month, the firm closed 439,000 square feet in leases, with the other properties located in Irvine and San Diego.
Amazon’s new Santa Monica facility will house Amazon Studios, its television and film production arm, once it opens in mid-2023.
Amazon may find itself with a new landlord soon. In November, J.P. Morgan Asset Management listed the Water Garden for sale with an asking price of $1.4 billion.
3. 8401 and 8403 Fallbrook Avenue | Quest Diagnostics | 199.6K sf
Clinical laboratory company Quest Diagnostics signed a lease renewal at 8401 and 8403 Fallbrook Avenue in West Hills in September.
The property is a three-building complex on a 16.2-acre lot, city records show. The landlord, Kennedy Wilson, bought the property for $163 million in 2019.
The transaction ranked as the biggest lease deal in Los Angeles in the third quarter.
4. 2700 Colorado Avenue | Lionsgate Entertainment | 193K sf
Film studio Lionsgate signed a lease extension for its Santa Monica offices in January.
Its space is part of a 316,000-square-foot complex that covers 2600 and 2700 Colorado Avenue. Lionsgate is the lone tenant on the 2700 Colorado portion of the compound, according to the property’s website. Meanwhile, the landlord, software firm Oracle, occupies 2600 Colorado. The complex also houses Asian fusion restaurant Tiato.
Oracle bought the property for $368 million in 2016. It was previously owned by a joint venture between Invesco and Santa Monica-based Worthe Real Estate.
5. 110 East 9th Street | Forever 21 | 163K sf
Clothing retailer Forever 21 agreed to move its headquarters from Lincoln Heights to Downtown Los Angeles.
The parent company of the fashion brand, Sparc Group, closed the transaction in July. Aside from housing Forever 21’s headquarters, the space has been earmarked for the West Coast employees of Lucky Brand.
The property, known as the California Market Center, recently completed a $250 million renovation.The landlord, Brookfield Properties, is also a part owner of Forever 21. It bought a controlling stake in the three-building complex in 2017.