LA Class-A Office Sales Volume Likely to Surpass 2018: Report
Office building sales in Los Angeles this year are on track to surpass the $7 billion generated in 2018, according to a first quarter 2019 market report from CBRE.
In the first three months of 2019 alone, office building sales in the Greater Los Angeles area totaled $2.3 billion. With another $3 billion in office properties currently on the market, CBRE projected that 2019 will best 2018 in occupan
The brokerage firm attributes the sales boost to a surge in leasing demand from tech firms and media companies, which has led to an increase in occupancies, rents as well as sales price.
“Rents are rising,” Nico Vilgiate, an executive vice president at Colliers International told Commercial Observer. “We are experiencing positive absorptions and some major office leases have been inked in West L.A. and Hollywood as Google, Amazon Studios and Netflix continue to grow in our market. Building values have been increasing over the past eight years at a record clip too.”
According to CBRE projections, the average price per square foot for Class-A office product is expected to rise to $800 per square foot with total sales to potentially rise to more than $8 billion in 2019.
Leading the list of the top five sales transactions thus far for 2019 is Hackman Capital Partners’ purchase of the CBS Television City property in the Fairfax district for $750 million, which was finalized in January. Next up is Onni Group’s purchase of Tishman Speyer’s 1-million-square-foot office campus, Wilshire Courtyard, which is pending, for $630 million. The sale of Lantana Media North to Skydance for $350 million, which closed in March, took third, with Kennedy Wilson’s purchase of Corporate Pointe at West Hills for $163 million in January being the fourth-largest sale thus far for 2019. Vereit’s acquisition of Continental Tower is El Segundo for $140 million last month followed close behind.