Only 1.6 million square feet of office space was leased across Greater Los Angeles in the third quarter, as the overall market continued to slump amid Covid concerns.
In fact, July through September proved no better than what had been a dreary April through June, according to a Savills report cited by Commercial Observer.
The total amount of new office leasing in Q3 was down 61 percent year-over-year and 18 percent below Q2 numbers, according to the report.
Around 20 percent of L.A. total office space is now available, the highest percentage in eight years.
Tenants have been looking to shed space as well — space available via sublease is up reached 7.1 million square feet. That’s roughly 50 percent higher than the beginning of the pandemic. A record 1.1 million square feet of sublease space hit the market in the second quarter.
High asking rents for space at under-construction projects helped push asking rents up about 8 percent year-over-year, to $3.89 per square foot. Pricing should come down in the coming months, according to Savills.
Netflix’s lease of 171,000 square feet in Burbank for its animation outfit was the biggest lease of the year. Most of the other leases in the third quarter were short-term extensions — a sign that tenants are hesitant to make long-term commitments during the economic upheaval brought on by the pandemic.
The other two largest leases in Q3 were Universal Music Group’s renewal of 64,700 square feet in Santa Monica and LegalZoom’s 49,000-square-foot extension in Glendale, according to the Observer. [CO] — Dennis Lynch