LOS ANGELES-Construction has commenced on Culver City's 200,000-sf speculative office development Wateridge Two, despite a rising vacancy rate and an increasing negative net absorption in the West LA office market.

The office project, which is being developed by Newport Beach-based Crown Realty and Development, will stand on a 21-acre site near the intersection of Slauson Avenue and La Cienega Boulevard. It is being built in response to the strong leasing activity encountered at the adjacent 330,000-sf Wateridge complex, which Crown Realty purchased for $50 million last August.

The overall vacancy level rose by 2.7% in the Westside office market over the first quarter; however, Wateridge enjoyed an increase in occupancy with the closing of three lease deals in February. While occupancy levels in some Westside office buildings plummeted due to cutbacks in the tech sector, Wateridge's occupancy soared to 99%. The developers are planning for similar activity at Wateridge Two, despite the news that West LA's vacancy level is at 11.1%, while its negative net absorption is at 1.1 million sf, according to the latest report published by locally based Cushman Realty Corp.