Irvine Q1 2016 Office Market Update

The most expensive class A market for medical space in Los Angeles County is Irvines, according to a report by NGKF and confirmed by Synergy Real Estate Groups own agents.. At the end of the first quarter 2016, the asking rate was $5.42 per square foot per month, slightly ahead of Santa Monica, which was asking $5.12/square foot.

In its peak in 2008, overall asking rent in Irvinewas $4.45 per square foot per month, meaning that the current rates are 12.4 percent higher than they were then. For comparison, the West Los Angeles market as a whole is just 0.2 percent above its 2008 peak.

In the first quarter, vacancy rates did climb from 6.5 percent up to 7.1 percent, a growth of 60 basis points. However, that 7.1 percent is still one of the lowest vacancy rates in Los Angeles, especially on the Western side of the county.

There was a net absorption of negative 14,804 square feet, which was the largest new occupancy loss in one quarter for Irvinesince 2012. This is not offset by any new construction that occurred in the first quarter of the year.

We also did not see any major leases being signed in the current market, with the biggest being the 5,898 square foot lease signed by United Talent Agency, for their space located at 9336 Civic Center Drive. The next largest was Cellar of Irvines, which signed a lease on a 5,576 square foot space located at 9250 Wilshire Boulevard.

Photo credit: Flickr user Skinny Lawyer

Irvine Office Space Demand is improving in 2015

Published December 12, 2015 | By John Galaxidas

image003The market for office space in San Diego are seeing a spike in leasing activity in 2015, as tenants lease more space to house the growing San Diego workforce.

As brought up in a recent article published on Dec. 1, 2014 from the SD Tribune, Offices set to go ‘Robust’ in 2015, By Roger Showley, many San Diego businesses are becoming more profitable. “Consequently, their staff count has risen, on average, by 12 percent. This equates to companies outgrowing their current space and requiring more space. As Tenants leases expire, companies in San Diego will soon be requiring larger space.'”

“January through October 2014 nationally, 679,000 office jobs were added, equating to a space need of 120-140 million square feet. But the actual leases will take down only a projected 65 million square feet this year. If job numbers hold up and leases start to be signed to accommodate more bodies, “net absorption will go from modest to robust in 2015.”

“For all its challenges, the office sector has slowly been tightening for four straight years,” he said, “and 2015 will be the first year where vacancy falls below its pre-recession average.”

Jobs are key, and they are growing in particular sectors, such as health care. Kaiser Permanente is expected to increase its office space to about 100,000 square feet in Mission Valley and Sharp Healthcare wants to build its own building of about 120,000 square feet in Rancho Bernardo.”

As for lab space, San Diego’s fastest growing business sector, industrial building owners in Sorrento Valley are converting their obsolete industrial spaces into Class “A” lab space suitable for high end bio-tech users.

This year alone, rental rates are projected to increase by 7% – 10%, and continue to do so year-to-year.

In San Diego, the fundamentals are all here, a highly educated employment base and a highly desirable business location, rental rates are bound to climb.