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.