Office Vacancies Decrease, Shooting Up Rent Cost

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Although office vacancies across Los Angeles have increased, exactly the opposite has taken place in Koreatown. That has also increased the monthly rent for tenants.

In the first quarter of this year, office vacancies in the L.A. County has slightly increased to 15.2 percent compared to the last quarter (14.6%), reported the L.A. Business Journal. However, average monthly rent has increased by 16 percent from $3.12 to $3.62 per square foot.

Notably, areas such as Westwood and San Gabriel Valley recently saw office vacancies rise. Even the likes of Beverly Hills, Santa Monica and Culver City now have more office vacancies. The vacancies in those three cities have now reached 15.7 percent, although it was just at 13.4 percent at the end of the last quarter. In San Gabriel, office vacancies have risen from 12.3 percent last quarter to 15.9 percent today.

However, exactly the opposite has happened in Koreatown. The office vacancy at Wilshere Center recently decreased dramatically to 14.2 percent from 22.2 percent. That equates to 418,283 square feet of office space taken during the same time frame. As more tenants are now occupying the available office spaces, the average rent per month has also increased by 63 percent to $2.77 per square foot from $1.70.

The problem with the recent trend is that the decrease in vacancies does not necessarily mean that the economy is booming again with businesspeople. A lot of it has been triggered by Jamison Properties, a firm that owns most high rise buildings in Koreatown, which has been converting office buildings into apartments. As the supply of office spaces become more limited, business owners are seemingly more burdened.

Meanwhile, office vacancies in downtown L.A. has decreased to 16.2 percent from 16.6 percent last year, while rent increased to $3.55 from $3.32.

The area with the highest average rent in the L.A. County is currently Santa Monica at $5.68 per square foot. Beverly Hills came in at second with $5.33. The area with the least expensive rent is near LAX at just $1.88.
By Hyunwoo Kim