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Los Angeles Office Space Market Conditions

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Los Angeles, known as the City of Angels, boasts a population of 3.82 million people soaking up the sunshine and surfing the waves, making it the most populous city in Southern California.  It is home to people from over 140 countries, speaking 224 different languages.
The city is made up of 80 districts and neighborhoods.  Some of the more well known communities are Venice, Bel Air, Hollywood Hills, and Brentwood. Generally, Los Angeles is divided into the following areas: Downtown Los Angeles, East Los Angeles, Northeast Los Angeles, South Los Angeles, Harbor Area, Greater Hollywood, Wilshire, Westside, and San Fernando and Crescenta Valleys.

Los Angeles is not only a mecca for the entertainment and media industry, but also for tourism.  With so much diversity in Arts and Culture, over 800 museums and art galleries, sports teams from all major leagues, and some of the most beautiful beaches in the U.S., Los Angeles is the place to be.

Los Angeles boasts a very diverse and driven economy.  One of the most substantial economic markets in the U.S., Los Angeles has strengths in business, international trade, entertainment, medicine, research and media, just to name a few. The Long Beach and Los Angeles ports, together, comprise the fifth busiest port in the world.  The city is home to six Fortune 500 companies, including real estate group CBRE.  The Downtown Financial District holds offices for many of the U.S. top financial companies, including Wells Fargo, and Bank of America.

Being the second largest city in the U.S. comes with its share of problems though, including a high crime rate and high taxes.  With the city of Los Angeles charging a gross receipts tax based on a percentage of business revenue, many companies have opted to move outside of the city limits into neighboring cities with flat tax fees.  In order to attract more new businesses to Los Angeles, the city has implemented several local incentives, including Work Opportunity Tax Credit, and reduced parking requirements.

In the second quarter of 2013, the Los Angeles office space market experienced a +18,800 square feet net absorption, an increased office vacancy rate of 18.2%, and an increase of asking rental rates to $2.52 per square foot per month or $30.24 per square foot per year.  Given the current office market conditions, tenants are able to obtain landlord concessions such as free rent and improvements. West Los Angeles appears to be the most expensive office space in the area, coming in at $3.33 per square foot per month ($40.00 / sf / yr).


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By: James Osgood

Los Angeles Office Space , Office Rental , Office Space

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