Los Angeles Office Update – 1st Quarter – 2010

West LA Office Market Highlights:

Total Vacancy – 15%  – About 152,000 of the Yahoo! sublease in Santa Monica went vacant in the first quarter

Direct Current Monthly Lease Rate:  $3.45/FSG

Net Absorption (Negative)  -248,232 sq. ft.  (Approximately 100,000 of negative absorption was in Century City with HBO vacating)

This is the highest overall vacancy rate in West LA since the second quarter of 2004

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Los Angeles Office Market, as a whole:

During the first quarter 2010, the Greater Los Angeles office market experienced a direct vacancy rate jump from 14.8% at the end of the fourth quarter 2009 to 15.3%. The overall vacancy rate, which includes sublease space, also increased from 16.6% to 17.1% over the same period, the tenth straight quarterly increase.  As a result, seven of the nine submarket areas in Greater Los Angeles witnessed negative net absorption for the quarter with four of them totaling more than negative 200,000 square feet. This represented the eleventh straight quarter with negative net absorption in the LA office market.

Current Sub-Market Overall Vacancy Rates (Direct and Sub-Lease):

Downtown:   17.4%

Hollywood/Wilshire Corridor:  15.6%

San Fernando Valley:  20.8%

South Bay:  18.1%

West Los Angeles:  15%

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Other Stats:

The unemployment rate in Los Angeles County was 12.3% in February 2010, compared to a rate of 12.8% for California and 10.4% for the nation.
At the end of the first quarter 2010, the overall vacancy rate in Greater Los Angeles increased for the tenth straight quarter totaling 17.1%.
The weighted average asking lease rate for office space in Greater Los Angeles dropped during the first quarter to $2.45, a 2-cent decrease compared to the fourth quarter 2009.
Net absorption during the first quarter of 2010 totaled nearly 966,000 square feet of negative activity in Greater Los Angeles.