Greater Downtown/Arts District Fuels Activity
- Similar to the first quarter, the Greater Downtown/Arts District submarket accounted for the lion's share of leasing volume for the quarter, recording nearly half (49.8%) of all activity.
- Move-ins in the Financial District and South Park submarkets drove demand of 141,000 square feet in Downtown Los Angeles this quarter.
- Vacancy corresponded with a 50-basis-point drop to 18.1%.
- The overall asking rental rate rose to $3.56 per square foot (PSF) full service gross (FSG), an increase of 4.7% year-over-year.
- Immediately after occupying its Ford Factory headquarters building in the Arts District, Warner Music Group purchased the property from developer Shorenstein.
Downtown L.A. vacancy is expected to contract slightly as positive demand counters new construction deliveries. Interest from out-of-market tenants persists, especially in the media and technology industries, and has helped legitimize Downtown Los Angeles as a competitor to markets such as Hollywood and Silicon Beach. The delivery of a slate of new projects in the Greater Downtown/Arts District submarket will continue to exert upward pressure on asking rates, particularly in Class B inventory.