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Office tenants remain “on the sidelines” in Los Angeles
Total square footage leased during the third quarter trails the five-year average
Prospective office tenants in Los Angeles County are “on the sidelines,” according to a report from Savills, with most putting any potential expansion plans on hold through the second half of the year.
Across L.A., the brokerage found 26.5 percent of all office space was available in the third quarter. While a slight improvement from the second quarter — when 26.6 percent was available — it’s a full percentage point higher than the third quarter of last year.
Monthly average asking rents across L.A. were $3.86 per square foot in the third quarter — flat from a year prior.
Downtown L.A., a submarket that has become ripe with defaults, delinquencies and lease exits, is continuing to see one of the higher availability rates across the city.
About 30 percent of all office space was available for lease in the third quarter, roughly the same as last year and the second quarter.
The largest new lease signed in the third quarter was for a building that won’t be finished until 2026.
Clearlake Capital signed a 151,100-square-foot, 15-year lease to take up 1950 Avenue of the Stars, JMB Realty’s 37-story project under construction in Century City.
The second largest was Penske Media’s move to McCarthy Cook and Northwood Investors’ Lumen West development at 11355 West Olympic Boulevard. Kim Kardashian’s apparel company Skims and Tiktok parent ByteDance also signed new leases for more than 90,000 square feet.
Savills noted Hollywood strikes have affected leasing, as entertainment and media companies have put plans on hold.
“Expect overall leasing activity to most likely remain lower than the five-year quarterly average of 3.2 million square feet through year-end,” Savills added in its report.