Vacancy Rate in Downtown Seen Leveling

With construction slowing and demand increasing, especially from the East Coast and the Pacific Rim, downtown Los Angeles office vacancy rates will continue to drop, according to Grubb & Ellis Commercial Brokerage Services. The firm predicted that vacancy rates could fall into the single-digit range by the end of the year.

Grubb & Ellis placed vacancy rates in downtown structures at 14.8%, while Coldwell Banker Commercial Real Estate Services determined the figure to be 16.3%.

According to Jeffrey T. Carey of the Los Angeles office of Grubb & Ellis, vacant space totaled 3,570,982 square feet from an existing base of 24.1 million square feet. This compares with a vacancy rate of 14.9%, or 3,435,639 square feet from a base of 23 million square feet at the same time last year.

“We are witnessing the long-anticipated leveling off of construction in the downtown region,” he added.

Office vacancy rates also declined in the San Fernando Valley, to 18% or 2.8 million square feet vacant from the current base of 15.9 million square feet. A year ago the vacancy factor was 21%, according to Grubb & Ellis.