West L.A. is a pillar of the Greater L.A. office market, but this year, activity has slowed. In the last four quarters, leasing activity has slowed in key L.A. submarkets, including the Westside, and rents have stabilized. On the Westside, asking rents fell 4% quarter over quarter, and 5% for class-A space specifically, according to the third-quarter report from Savills Studley. Year-over-year, rates are flat. Alternative Westside markets like Play Vista are no longer a discount, causing tenants to leave and find alternatives. To find out why activity is slowing and how other submarkets in L.A. are being impacted, we sat down for an interview with Jeff Cowan, senior managing director at Savills Studley.
GlobeSt.com: What has slowed leasing activity in the West L.A. office market?
Jeff Cowan: Several factors including rising rental rates (coupled with large annual increases); rising cost of construction requiring most tenants to come out-of-pocket for the build-out; and fear of committing to a long-term lease when the economy may slow down and rents could decline.
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