The San Fernando Valley had a net absorption of 1,546 sf in the first quarter, while both the Tri-Cities area and West LA experienced negative net absorption of 400,368 sf and 1.1 million sf, respectively.
"Downtown LA has bucked the regional trend with two consecutive quarters of net absorption," says Mitchell F. Russ, the manager of real estate services for Cushman Realty Corp.'s Los Angeles office. "Ironically, a deceleration in the regional economy may benefit Downtown LA, as companies refocus on facility strategies that aggressively minimize occupancy costs. Also, current bargain rental rates for class A properties are driving the CBD recovery."
In the other areas of the region, the tech wreck stymied absorption. As an increased number of dot-coms consolidated and closed throughout the first quarter, an excessive amount of direct and sublease space was dumped onto many of the region's office submarkets.
Downtown was the only area to experience a drop in its vacancy rate, which fell 1.28% to 20.61%. The San Fernando Valley experienced the largest jump in vacancies, as the area's level increased by 3.43% to 15.4%. Meanwhile, the vacancy rates in the Tri-Cities area and West LA both rose to 11.10%. The Tri-Cities' level jumped by 2.5%, while West LA's rate increased by 2.7%.
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