New Construction Drives Up Vacancy While Rents Continue To Rise According to NAI Capital's Office Market Outlook For Los Angeles, CA
Los Angeles, CA, Thursday, May 11, 2017– According to research provided by NAI Capital, in the first quarter of 2017 the Los Angeles Office market vacancy rate ticked up 60 basis points to 11.4% as one million square feet of office space was delivered approximately 60% vacant. Average asking direct rental rates registered $3.02/SF, up 6.7% over last year. Average asking rents are 9% higher than the peak of the previous cycle reached in 2008. Sales activity also increased substantially this quarter, rising 23% over last quarter to 6.5 million square feet.
According to Joseph Faulkner, Executive Managing Director with NAI Capital’s downtown office, “More buildings are being purchased by large owners. This concentration in fewer and fewer owners allows rents to rise even though vacancy is rising or flat.”
The strengthening jobs market is contributing to the demand for office space. Total nonfarm employment in Los Angeles County increased by 1.9%, representing a net gain of 84,300 jobs from March 2016 to March 2017. As new construction is being added to the market, vacancy is beginning to ascend. Office space under construction totaling some 4.1 million square feet is about 31% preleased as of the end of the quarter.
To access the full Los Angeles Office Market Outlook report, visit:
About NAI Capital
NAI Capital is the largest independently owned full service commercial real estate firm headquartered in Southern California. As one of the largest members of NAI Global, the premier managed commercial real estate service network with 400 Offices and 7,000 market leaders spanning the globe, NAI Capital provides a complete range of transaction, valuation, investment, property management and consulting services. By leveraging our local expertise with our global reach, NAI Capital offers innovative, customized solutions and seamless service to owners, tenants, investors and developers throughout Southern California. NAI Capital clients have built their businesses on the power of our expanding network. We are a dynamic growing commercial real estate company. At NAI Capital we work together putting our clients first.
NAI Capital Brokerage CA BRE #00806840.
To learn more, visit www.naicapital.com
About NAI Global
Founded in 1978, NAI Global is a leading global commercial real estate brokerage firm. NAI Global Offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 400 Offices strategically located throughout North America, Latin America, Europe, Africa and Asia Pacific, with over 7,000 local market professionals, managing in excess of over 425 million square feet of property. Annually, NAI Global completes in excess of $20 billion in commercial real estate transactions throughout the world.
NAI Global provides a complete range of corporate and institutional real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services.
To learn more, visit www.naiglobal.com.
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