The Los Angeles real estate market continues strong despite moderate overbuilding.
This is the conclusion of a study published by the New York-based Valuation Network and prepared by Charles R. Wilson & Associates Inc., Pasadena, and the Epstein Co., Van Nuys.
Supply exceeds demand in the office market, the report says, but the extent of overbuilding varies among the submarkets. Vacancies range from 5% in Century City to more than 30% near Los Angeles International Airport.
There is no such thing as an average office vacancy rate in Los Angeles, but downtown currently has about 3.5 million to 4 million square feet available, representing about 15% of the supply of space in offices of 20,000 square feet or more. Downtown has absorbed more than 1-million square feet a year since 1980.
The report says the trend in retail development is toward small centers containing one or two anchors such as a market and a drugstore. While multistory retail construction is being tried in high-density areas, its success has yet to be proved.