SOCAL OFFICE REAL ESTATE SNAPSHOT MAY 2014 ~ SPRING RESURECTION

April 30, 2014 on 1:56 pm | In Bravo, Fascinating Information, Market Snapshot, Office Fodder, Statistics, Trends, Uncategorized | 4 Comments

by Jodi Summers

Bravo! The pundits are predicting that the Los Angeles office market will make some headway this year after lollygagging for the previous four years. Even formerly quiet office zip codes like 90025 and 90034 are picking up steam as the Silicon Beach coastal office market of Venice, Santa Monica, Marina del Rey, Mar Vista, Playa Vista and Culver City continues to see shrinking vacancy rates.

Let us look at Marcus & Millichap’s 2014 Market Outlook; it’s full of good news for the Los Angeles Real Estate market for a change.

◆ 2014 National Office Performance Index Rank for Los Angeles is 5 – up 3 places from last year. Our rise is attributed to strong rent gains and high absolute job growth.

The Employment Development Department (EDD) notes that in Los Angeles County, the seasonally adjusted unemployment rate in March was 8.7% – down from the year ago rate of 10.1%.

◆ Employment Forecast: Employers will create 81,000 jobs this year, expanding payrolls by 2.1%. Office-using employment will grow 2.6% as 26,000 positions are generated.

In California, nearly every major private industry sector added jobs over the year: construction; trade, transportation and utilities; information; professional and business services; educational and health services; leisure and hospitality; and other services. Professional and business services posted the largest gain on a numerical basis, adding 88,100 jobs over the year (up 3.8%). Construction increased the number of payroll jobs by 5.9% (adding 37,100 jobs).

◆ Investment Forecast: The potential for rising interest rates and an increase in the number of CMBS loans that are coming due should encourage more buyers to deploy capital in office assets.

As Loopnet notes, Current Los Angeles market trends data indicates an increase of +4.9% in the median asking price per sq ft for Office properties compared to the prior 3 months, with an increase of +12.8% compared to last year’s prices. County-wide, asking prices for Office properties are 4.4% higher at $283 per sq ft compared to the current median price of $321 per sq ft for Office properties in metro L.A.

◆ Vacancy Forecast: Light construction will facilitate a dip in vacancy to 14.2%.

◆ Rent Forecast: After a 3.9% rise in 2013, average full-service rents will climb another 3.9% in 2014 to $30.86 per square foot.

As Loopnet notes, the average asking rental rate per sq ft/year for Office properties in Los Angeles as of Mar 14 was $25.05. This represents an increase of 0.8% compared to the prior 3 months, with an increase of +4.7% year-over-years. County-wide, average rental rates in L.A. County are +1.1% higher at $24.17 per sq ft/year for Office properties currently for lease.

◆ Construction Forecast: Only 550,000 square feet of office space will come online in 2014, down from 1.2 million square feet last year.

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.

**

http://laedc.org/business-assistance/additional-resources/e-edge-newsletter/#1

http://www.marcusmillichap.com/research/researchreports/reports/2014/01/06/los-angeles-apartment-research-report

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

4 Comments »

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  1. It’s not exactly shocking that the top one percent are much whiter than America as a whole, but it is worth noting. The overwhelming maleness of the top 1 percent is also interesting in a world where some people are proclaiming that the economy is working great for women. But the same survey also shows that 70 percent of the “next 90 percent” are male. This appears to be an artifact of Survey of Consumer Finances methodology, which appears to code mixed-gender married couples as male.

    Comment by Vox — May 1, 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 L.A. Biz — May 1, 2014 #

  3. Most coworking offices have a comfortable living room feel with couches, comfy chairs, and desks with electrical outlets for lap top computers. Many are open 24/7 and supply kitchens stocked with coffee, tea, juice, energy drinks and some have free beer and wine.

    Most have meeting rooms available and personal offices for an extra cost. All provide high speed internet, Wi-Fi and offer a month to month membership like a gym.

    Tech startups, writers, entrepreneurs, and entertainment individuals work at these coworking facilities as members usually paying month to month. Most individuals work for themselves or for small startup companies. These people are looking for like- minded individuals to co-mingle.

    Comment by SM Mirror — May 6, 2014 #

  4. The number of people receiving unemployment insurance fell again for the week ending May 3 from the previous week’s numbers, down 9,000 to a seasonally adjusted figure of 2.68 million. That’s the lowest unemployment has been since December 1, 2007, when it was 2.64 million.

    The 4-week moving average was 2,694,500, a decrease of 18,500 from the previous week’s revised average. This is the lowest level for this average since December 15, 2007 when it was 2,670,500.

    The seasonally adjusted insured unemployment rate was 2% for the week ending May 3, unchanged from the previous week’s rate, according to the Bureau of Labor Statistics.

    Comment by Housing Wire — May 16, 2014 #

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