Office ents in Los Angeles increased 9.3 percent in the final quarter of 2017 compared to the same time period in 2016. That translated to an increase of $3.29 per square foot despite the fact that vacancies were also on the rise in that market. Vacancy rates were at 15.1 percent in 2017 compared to 14 percent in 2016. This was partially attributed to new construction creating more space for lease.
It is believed that 4.8 million square feet of rental space will be completed in the next two years, which could further exacerbate vacancy rates in the future. However, consumer preferences are also playing a role in increasing vacancy rates as companies do more with less space. The Westside portion of Los Angeles seems to be bucking those trends. Demand is seen to be strong with less new construction being forecast in upcoming years.
Overall, 12 million square feet of real estate was leased in 2017. That was down from 14 million square feet in 2016. However, investment activity increased by 17 percent to 19.4 million square feet. Some of the larger deals included Apple acquiring 85,000 square feet at the La Cienega project. Co-working companies WeWork and Spaces also signed deals to acquire 60,000 and 50,100 square feet respectively. Spaces also acquired a 60,000 square feet space in Hollywood.
Those who are looking to lease commercial real estate may need to do due diligence prior to closing on a deal. This may involve consulting with an attorney and an accountant. Doing so may make it easier to determine if a proposed lease agreement is both legal and in the best interest of a potential tenant. If there are disputes before or after a lease is signed, an attorney may help to resolve them.
