Los Angeles County hasn’t seen this much available office space in over 10 years.
Availability inched up to 24.4 percent in the third quarter, slightly above the 24.1 percent in Q2, according to a Savills report. The latest figure was also far above the 20 percent for the third quarter of 2020.
Firms inked 3.2 million square feet of new space across the county from July through August, about 100,000 square feet more than in the second quarter. It was also twice as much as was signed in Q3 2020.
But 44 percent of leases signed last quarter were for relocations, meaning many of them could have trimmed their office space. One lease deal was from biopharmaceutical company Xencor, which shifted headquarters in July. It moved into 129,500 square feet at LPC West and Angelo Gordon’s 465 N. Halstead Street in Pasadena from Monrovia.
Technology, advertising, media and information firms — or TAMI firms — represented around 43 percent of all major transactions in Q3, the report added. Last month, gaming giant Activision Blizzard subleased 90,000 square feet at LPC West’s Pen Factory complex in Santa Monica. The company leased another 90,000 square feet in Playa Vista, according to the report.
Downtown L.A. and Hollywood had some of the highest availability rates last quarter, clocking in at 29.5 percent. The tightest market was Burbank, where just 9.4 percent of space was available.
“A full office market recovery will remain slow and uneven,” the Savills report said, adding the turnaround would depend on the state of the virus across L.A. County and companies’ work from home policies.
Even with high availability, office rents are still rising across the county. Overall asking rents for office space was $3.87 per square foot last quarter, up from $3.66 per square foot in the third quarter of 2020. For Class A properties, asking rents rose to $4.11 a foot.
Some submarkets had even higher office rents, including Century City, Santa Monica, Marina del Rey and Playa Vista. Office rents in the San Gabriel Valley were the lowest across the county last quarter.