Co-working companies led Los Angeles area office leasing in the first quarter amid a tightening overall market, with media firms also emerging as a big player in the office investment space.
Overall vacancy across the Greater L.A. market dipped from 14.8 percent in the fourth quarter of 2018 to 14.4 percent, according to a new report from JLL.
Vacancy will continue to tighten thanks to strong demand from new media companies, according to the report.
Average asking rents grew by $0.84 per square foot to $43.68 from the fourth quarter of 2018.
Media production companies were involved in some of the biggest sales of the quarter.
CBS Corporation closed a $750 million sale of its iconic CBS Television Studio complex in the Fairfax District to Hackman Capital Partners, according to JLL. Other outlets including The Real Deal reported the sale closed in December.
Skydance Media paid $321 million for 278,000 square feet of the Lantana office complex in Santa Monica.
On the leasing side, co-working firms led the pack.
They added space around the L.A. area in the first quarter, racing to establish themselves and outmaneuver competitors. Industrious, Spaces and market titan WeWork all added leased new spaces in the first quarter.
Knotel and Carr Workplaces each leased their first L.A. locations in the first quarter as well.
WeWork alone signed leases totaling 319,000 square feet in the first quarter, including in North Hollywood, Downtown, and at Santa Monica’s Lantana campus.
That pushed its overall L.A. footprint up to 2 million square feet.
JLL CEO Christian Ulbrich said in a February earnings call that “flex-based [co-working] companies have become an important client” and that “a significant proportion” of the company’s growth over 2018 was because of co-working clients.
The Westside office market was the strongest in the L.A. area last quarter —404,000 square feet of net absorption accounted for two-thirds of the total in Greater L.A.