Yet again, Beverly Hills is leading the charge in 2019 with the most expensive rates for Class A office space in West LA at $5.76 psf/mo, just a notch above Santa Monica at $5.65 psf/mo, according to report by C&W and confirmed by Beverly Hills Office Space Real Estate Groups own agents.
Compared to West Los Angeles County, which average asking rate is $4.64 psf/mo, Beverly Hills is dominating in demand due to the ample opportunities. These rates have relatively remained flat over the past couple quarters, while Beverly Hills rents have continued to see an increase. Also, the West Los Angeles County currently has the highest asking rate for rent in Los Angeles County, which shows the demand that Beverly Hills has.
Even though rents are higher, overall vacancy continued to decline, decreasing by 30 bps from the previous quarter, resulting in a vacancy of 11.7%. Even with a remarkable amount of new office supply delivering in 2018, the vacancy rate has continued to decrease over the past year, with a total decline of 100 bps.
New leasing activity sky rocketed in the first quarter of 2019, with activity reaching over 1.4 msf. This has been the largest quarter of leasing in the past five years. With strong tenants, such as Beachbody, Tennis Channel, and WeWork, leasing up offices in Beverly Hills, the activity has only just began to rise.
There was a positive net absorption of 160,610 sf, which is one of the best absorption numbers that Beverly Hills has seen in a while. Even though the vacancy rates are increasing, Beverly Hills and Santa Monica have the lowest vacancy rates in the Greater Los Angeles Area. Also, in the first quarter of 2019, Beverly Hills and Santa Monica currently have over 1.8 msf under construction, which could result in higher net absorption for years to come.