The Orange County and Los Angeles County markets ended the second quarter 2015 with decreased vacancy rates and increased rental rates. Orange county vacancy rate decreased 0.3% to 10.1% (Class A is 12.7%) while Los Angeles County had a 0.4% decrease to 11.2% (Class A is 14.5%).
The average asking rental rate in Los Angeles County was $2.56 per square foot per month, representing a 2.3% increase from the first quarter 2015. Class A average asking rental rates in Los Angeles County are $2.83 per square foot per month. Orange County saw an average rental rate increase of 2.3% as well, at $2.12 per square foot per month. Class A average asking rental rate was $2.44 per square foot per month.
Net Absorption for the overall Orange County and Los Angeles County markets was positive in the second quarter of 2015. Orange County had a net absorption totaling 412,158 square feet and Los Angeles County’s net absorption was positive 1,685,780 square feet. Tenants moving into large blocks of space in 2015 include St. Joseph Heritage Medical Group at 200 E. Center Street and Universal Music Group into Hines Warner Center.
Seven buildings, totaling 522,343 square feet were delivered in Los Angeles County while 3.8 million square feet of office space is still under construction in Los Angeles County. Orange County delivered three buildings totaling 70,318 square feet with 660,000 square feet of office space under construction at the end of the second quarter 2015.
Tallying office building sales of 15,000 square feet or larger, Orange County and Los Angeles County office sales figures fell during the first quarter 2015 in terms of dollar volume compared to the fourth quarter 2014. 36 office transactions closed in Los Angeles County in the first quarter, with a total volume of over $1.1 billion. Orange County closed 17 office transactions with a total volume of $320 million. Cap rates in Los Angeles County have been lower in 2015, averaging 5.66%, while Orange County has seen higher cap rates in 2015, averaging 5.81%.
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