WESTERN SNAPSHOT, NOVEMBER 2004

West Los Angeles Office Market

Buckley

Overall, the West Los Angeles office market is experiencing a very modest level of development, according to Rick Buckley, principal at Madison Partners. “Only a single high-rise, 2000 Avenue of the Stars, is currently under construction in Century City, and it required a pre-lease of 180,000 square feet from Creative Artists Agency to make it possible,” he says.

Most of the buzz is being made on the leasing side of the market. Buckley says that the Century City submarket will have some vacancy for the first time in a long while, which can be viewed as a positive due to the healthy demand for space there. When developer Trammell Crow Company completes the $275 million 2000 Avenue of the Stars in 2006, 750,000 square feet of Class A space will be added to the market. “In addition, the MGM and Sony merger may result in as much as 400,000 square feet coming back on to the market,” says Buckley.

Buckley says that most of the large office leases today are for entertainment, advertising/public relations, media and law firms. Besides Creative Artists Agency’s $150 million, 15-year pre-lease in Century City, G4TechTV, a subsidiary of Comcast Corporation, has reserved 125,000 square feet in Westside Media Center at 12200 West Olympic Blvd. and Interpublic Group has leased 145,500 square feet in the Pacific Design Center at 8687 Melrose Ave.

Class A rental rates in West Los Angeles range from $2.35 to $2.75 per square foot. Real estate services firm Cushman & Wakefield reports that Los Angeles County office vacancy rates have dropped to their lowest levels since 2001, with the west side showing the greatest gains since the beginning of the year — 14.9 percent vacancy, down from 17.3 percent. According to Cushman & Wakefield’s numbers, Century City, the largest of West L.A.’s submarkets, has a vacancy of 14.8 percent while West Hollywood posted the lowest rate, 5.8 percent.

Buckley lists Westwood, The Miracle Mile and, of course, Century City as the submarkets to watch as 2005 approaches. “Westwood is definitely an area to watch, as what we think will be the largest block of contiguous space in West L.A. becomes available at 10960 Wilshire Boulevard.”

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