SOUTHERN CALIFORNIA—Newport Center Dr. in Newport Beach and High Bluff Dr. in San Diego are huge draws for office users seeking a prestigious Southern California address, offering high-end services and amenities for a hefty price, according to JLL. The firm recently revealed the results of its Most Expensive Streets study, which shows that High Bluff Dr. ranked 13th most expensive and Newport Center Dr. ranked 15th most expensive among streets throughout the nation.
The average full-service rent on High Bluff Dr. for Q3 2017 was $54, with the average market asking rent at $32.28 per square foot. The percent premium from street average to market average was 67.3%.
For Newport Center Dr., the average full-service rent was $50.16, while the average market asking rent was $33.36 per square foot. The percent premium from street average to market average was 50.4%.
The high price tag is not deterring tenants from leasing this space. JLL reports that only 12.8% of the nation's most expensive real estate is vacant—a full 250 basis points lower than the US average. According to managing director of agency leasing Chris Roeder in a prepared statement, in the battle for talent, companies are always looking for something new to give them an edge. “Developers recognize that these high-end amenities—roof decks, open and collaborative space, etc.—will draw the big-name tenants that help developments stand out.”
Southern California as a region is continuing to attract new tenants despite high rents, even on Newport Center Dr. and High Bluff Dr. As GlobeSt.com recently reported, The Woodmont Co., a Fort Worth-based national retail real estate company specializing in brokerage, development and management, has expanded its operations into Southern California with the launch of a new office at 620 Newport Center Dr. And in November 2015, Bank of America signed an 88,000-square-foot lease at 520 Newport Center Dr. to accompany the space it already occupied in the neighboring 500 Newport Center Dr.
Similarly, as we reported in August 2017, BGL Real Estate Partners, a division of Brown Gibbons Lang & Co., opened an office at 12707 High Bluff Dr., its fifth in the national network that includes locations in Chicago, Cleveland, San Antonio and Philadelphia. The firm billed the office as a “strategic location” in the Del Mar Heights submarket to service a growing San Diego real estate market.
JLL's report also listed the top 10 most-expensive streets in the country, which included:
- Sand Hill Rd., San Francisco
- Fifth Ave., New York
- Mission St., San Francisco
- Main St., Boston
- Greenwich Ave., Fairfield County, CT
- Pennsylvania Ave., Washington DC
- Ocean Ave., Los Angeles
- Boylston St., Boston
- Royal Palm Way, West Palm Beach, FL
- Congress Ave., Austin, TX
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
