Hollywood is leading office pre-leasing activity on new developments. According to a new report from JLL, the Hollywood market has leased nearly all of its new office space, with ICON and CUE 100% leased and Vine Street Tower 56% leased. The Westside, on the other hand, has pre-leased much less of its new office space, although the office developments in the market are slightly larger. We sat down with Hayley Blockley, managing director at JLL, for an exclusive interview about the Hollywood leasing market and how it is stacks up against the competition.
GlobeSt.com: What does the preleasing activity in Hollywood say about office demand in L.A.? Are you seeing demand shift from Westside markets?
Hayley Blockley: Hollywood's pre-leasing activity has surpassed leasing in the Westside markets. There is a definite “Netflix effect” happening as smaller entertainment companies try to position themselves closer to the mothership. Viacom's expanding presence and the expansion of fashion brands in the market have solidified Hollywood for the long term as a serious office market for the creatively minded.
GlobeSt.com: What are the benefits of the Hollywood office market?
Blockley: Centrally located to most parts of the City, Hollywood benefits from accessibility to transit, luxury and affordable housing and a “cool” factor in terms of amenities.
GlobeSt.com: What types of tenants are gravitating to Hollywood?
Blockley: Entertainment and all that means now—as content and technology overlap, we see growth in tech companies and start-ups, as well as ripple-effect tenants like talent agencies and specialized PR. Fashion is also booming in Hollywood, as well as a large jump in co-working operators.
GlobeSt.com: Because of the popularity, have you seen more demand from developers to build product?
Blockley: Yes, new office development is growing and creative office adaptation of existing buildings is rampant in many markets in Los Angeles, especially in Culver City, El Segundo, Santa Monica and the Arts District of Downtown Los Angeles.
GlobeSt.com: The Wilshire Grand brings additional square footage to an already soft office market. Do you think it will be difficult to lease-up the building?
Blockley: Despite the soft office market, new high-rise office supply has not been added to Downtown since the 90's. There does appear to be a fair amount of tenant demand for the new building, which stands out against the skyline with its onsite amenities and LED signage.
GlobeSt.com: Some reports show an increasing sublease market. How has sublease space affected newly delivered product in the L.A. market?
Blockley: There does not appear to be a strong correlation yet. Tenants touring the markets, looking at new construction are not typically the same type of tenants looking to take down sublease space.
GlobeSt.com: What is your outlook for office leasing in each of these submarkets for the next year?
Blockley: Submarket geographies are blurring. Tenants flock to the best product, differentiating factors such as ceiling heights, natural light, onsite amenities and ample parking drive rapid lease-up.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
