Greater L.A. Sees Rents Grow to Begin 2019
- The Greater Los Angeles Basin office market posted essentially flat demand of 670,900 square feet. Vacancy dropped accordingly by 10 basis points to 13.9%.
- After totaling just 60,500 square feet of deliveries last quarter, construction deliveries totaled 642,100 square feet to begin the year. Over six million square feet remains under construction, of which 63% will deliver in 2019.
- Asking rental rate growth increased at a trailing four-quarter average of 1.3% to end at 3.27 per square foot (PSF) full service gross (FSG). This is a 5.2% gain over last year.
- Space grabs by technology and coworking companies helped push leasing activity to 6 million square feet for the quarter.
- The Los Angeles Basin unemployment rate fell from last quarter, ending at 4.3%. Total civilian job growth was 0.8% as the economy stabilizes at virtually full employment.
The Los Angeles County office market recorded 331,200 square feet of net absorption and 302,300 square feet of deliveries as the total vacancy rate fell to 14.1%. Much of the positive movement stemmed from the Downtown L.A. submarket totaling 449,200 square feet.
Rental rate growth continued to rise, increasing by $0.04 to $3.42 PSF FSG. Six of seven Los Angeles County submarkets saw rates increase. Construction activity remains concentrated in Downtown and West Los Angeles, accounting for 64% of construction in the county.
Los Angeles County non-farm unemployment in February 2019 recorded 4.6%, a negative 2% change year-over-year. Over the past 12 months, Los Angeles County gained 38,000 non-farm jobs for an increase of 0.8%.