The office rental market in downtown Los Angeles has been stagnant for decades, but New York real estate firm Brookfield Office Properties Inc. is betting millions of dollars that it will improve in the years ahead.
Chief Executive Dennis Friedrich talked up downtown Los Angeles in a conference call with analysts Friday, a day after Brookfield announced plans to pay about $430 million for four large, prominent office buildings there.
“We are being realistic about the downtown market,” he said. “It’s going to be a slow, steady improvement.”
If the purchase is approved by shareholders of seller MPG Office Trust Inc., Brookfield would be the largest downtown office landlord, having 8.3 million square feet to rent in seven buildings.
Overall vacancy in the business district was 21% at the end of the first quarter, almost two percentage points higher than it was a year ago, according to real estate brokerage Cushman & Wakefield.