SOCAL OFFICE REAL ESTATE SNAPSHOT MARCH 2014 ~ CHEERS!

March 1, 2014 on 8:37 pm | In Bravo, Fascinating Information, Lease Rates, Market Snapshot, New Developments, Office Fodder, Statistics, Trends, Uncategorized | 2 Comments

By Jodi Summers

There is increased optimism in the Los Angeles office real estate market, especially along the coast, where jobs are being generated at a rate faster than the national average. Experts at the Urban Land Institute expect the current expansion of employment to continue into 2016.

Here’s our good news: the seasonally adjusted unemployment rate in Los Angeles County decreased to 9.2% in December 2013 from the rate of 10.3% one year ago, notes the Employment Development Department. As a point of reference, the California seasonally adjusted unemployment rate was 8.3% in December 2013, down 9.8% from December 2012. Nationally the numbers were 6.7% in December 2013 and 7.8% the year prior.

Increased employment is benefiting the office market. Current Los Angeles market data from Loopnet indicates that the current median price is $315 per sq ft for office properties in Los Angeles. This is an increase of +2.2% compared to the prior 3 months, and an increase of +18.1% compared to last year’s prices.

Developer sentiment in the office space market is optimistic in Southern California due to the increased rate of job growth in the region and a tightening supply of office space.

In January, according to Loopnet, the average asking rental rate per sq ft/year for Office properties in Los Angeles was $24.90, representing an increase of +3.1% year-over-year. County-wide, average rental rates in Los Angeles are +0.8% higher at $23.99 per sq ft/year for Office properties currently for lease.

Nationally, the growing demand for office space, combined with an extended period which has seen little to no new office construction, resulted in the average U.S. office rent to grow 3.1% in 2013 – the first time rents have cracked the 3% annual growth mark since 2007, the peak of the market cycle.

Finally, office investors are cheering the gains in asset values seen in 2013 from a strengthening recovery in the U.S. office market, and looking forward to an even brighter 2014 as virtually all the important metrics that drive rent growth and property income are expected to continue to improve over the next 12 months.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

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http://www.uclaforecast.com

http://www.facebook.com/uclaanderson

http://uclaforecast.com/contents/archive/2014/media_012914_1.asp

http://www.socalofficerealestateblog.com/?p=2502

http://www.youtube.com/watch?v=aVxIecBl7wI&feature=youtu.be

http://www.costar.com/News/Article/For-US-Office-Market-It-Was-a-Very-Good-Year/156702?ref=100&iid=372&cid=383F14EEE265B182474DA2442BACBBBF

http://www.loopnet.com/Los%20Angeles_California_Market-Trends?Trends=AskingPricesFS,SalePricesFS,TotalAvailableForSaleFS,NumberOfListingsFS,ProfileViewsFS,TotalNumOfUnitsFS,TotalSFAvailableFS,DaysOnMarketFS,AskingRentsFL,NumberOfListingsFL,ProfileViewsFL,TotalSFAvailableFL,DaysOnMarketFL&PropertyTypes=Office

http://blog.hellodesign.com/wp-content/uploads/2011/08/IMG_2776.jpg

http://www.loopnet.com/Los%20Angeles_California_Market-Trends?Trends=AskingPricesFS,SalePricesFS,TotalAvailableForSaleFS,NumberOfListingsFS,ProfileViewsFS,TotalNumOfUnitsFS,TotalSFAvailableFS,DaysOnMarketFS,AskingRentsFL,NumberOfListingsFL,ProfileViewsFL,TotalSFAvailableFL,DaysOnMarketFL&PropertyTypes=Office

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  1. While overall CRE investment volume rose 14% in 2013 from 2012 levels, office sector activity increased 17% to over $104 billion, the highest annual volume recorded for the four major property types.

    Although last year’s haul was still shy of the peak office investment levels we saw in 2007, it does demonstrate the return of strong investor interest in office property, although that wasn’t necessarily the case everywhere.

    Comment by Nancy Muscatello — March 4, 2014 #

  2. An 8-acre parcel in Beverly Hills next to the iconic Beverly Hilton on Merv Griffin Way is once again changing hands.

    The Los Angeles Times reported Thursday that the site of the 62-year-old building which most recently housed the Robinsons-May department store a decade ago is back on the market.

    The property at 9900 Wilshire Blvd., “one of the most desirable pieces of real estate in the country,” the Times says, “has seen multiple owners who have so far been unable to bring a condominium complex designed by a famous architect to life.”

    In 2010, Hong Kong private equity firm Joint Treasure International bought the parcel for $148 million. Experts in the Beverly Hills real estate market suggest the parcel is now worth somewhere in the mid-$300-million range.

    The owners intended to complete an existing plan to build 235 condos on the site. It’s unclear why they are now selling it. It’s also unclear how much they want for it.

    A major selling point of the property is an existing condominium complex design by Richard Meier, architect of the Getty Center, which was successfully navigated through Beverly Hills’ torturous city planning process, according to the Times.

    Comment by Housing Wire — May 1, 2014 #

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