Another quarter, another record for the amount of office space available across the Los Angeles market.
In the second quarter, 26.6 percent of all office space was available in L.A. County, according to a Savills report, up from 25.1 percent during the same period last year and 26.2 percent in the first quarter of this year.
Much of that uptick comes from subleasing — almost 2 million square feet of space has been put on the market over the last year, according to Savills.
“Many occupiers continue to take a wait-and-see approach which has contributed to lower leasing activity,” the report said.
But landlords still aren’t budging on rents. The average monthly asking rent was $3.84 a foot in the second quarter, up 1 cent from the first quarter, but down from $3.87 in the second quarter of last year.
“Average rental rates have remained stubbornly high despite eroded office valuations,” Savills added.
None of the 10 largest deals signed in the second quarter were new leases — all were either extensions, renewals, relocations from a comparable space or a sale-leaseback deal.
Availability increased across almost every L.A. submarket, including those with much lower availability.
The two tightest submarkets — the San Gabriel Valley and Century City — saw availability increase to 14.6 percent and 15.3 percent in the second quarter, respectively, according to Savills. In the first quarter, 14.2 percent of all office space in the San Gabriel Valley was available and 14.6 percent was available in Century City.
Century City still takes the cake for the highest asking office rents across L.A. In the second quarter, monthly asking rents rose to $6.19 a foot, up about 2.4 percent from the prior period.
In Downtown L.A. — an area some experts are predicting will see a 55 percent drop in office values — 30.3 percent of all office space is available, a slight uptick from 29.9 percent in the first quarter.
Read more
Los Angeles
Doomsday for Downtown LA's office market
Commercial
Los Angeles
KBS Realty CEO talks about office pain
Commercial
Los Angeles
Brookfield gives up on DTLA office after defaulting on $1.1B in debt