The Westside's office space vacancy rate has reached a five-year low of 11%--the lowest in the Los Angeles Basin, according to a quarterly report released last week by a major real estate firm.
The survey by Grubb & Ellis Commercial Brokerage Services says that 2.9 million square feet out of a total 26.3 million square feet of Westside office space is empty.
"The Westside section of Los Angeles . . . has become one of the nation's healthiest commercial real estate markets," said Gregg Gann, Grubb & Ellis vice president and district manager.
Busineses long have been attracted to the Westside because of its climate and beach access, desirable residential areas and labor supply, according to area real estate officials.
Gann said that 497,497 square feet of space was leased in the first quarter of this year, much of it in the Marina del Rey sub-market, which includes Culver City and Fox Hills, and in the Century City and Beverly Hills sub-markets.
The leasing of 145,765 square feet of office space in the Marina sub-market resulted in a 6% drop, to 11%, in the area's vacancy rate, the survey said. Century City had a 7% rate with the leasing of 100,999 square feet and Beverly Hills had an 11% rate with the leasing of 95,774 square feet.
The Westwood sub-market had a 5% rate, the lowest in the Westside, while Brentwood had the highest with 21%, according to Grubb & Ellis.
Gann said that Westside lease rates vary widely, averaging about $2 a square foot.
About 16% of the 4.5 million square feet of space under construction in the Westside has been pre-leased, he said. The Miracle Mile-Miracle Park area has the largest amount of space under construction, about 1.5 million square feet, and more than 645,000 square feet of this has been pre-leased, according to the study.
Gann predicted that the vacancy rate will level off by year's end and that the office-space supply eventually will dwindle as the potential for high-rise development in the Westside diminishes.
"We will see less land available for development, and the threat of a building moratorium in our market would limit future high-rise development," he said.