Los Angeles County Office Fundamentals Return to More Sustainable Levels

LOS ANGELES, CA — After recording five consecutive years of steady occupancy gains and robust rent growth, the Los Angeles office market is forecast to soften modestly this year, with fundamentals returning to more sustainable levels, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

(Ronald Reagan State Office Building, top right)

By year end, office-using employment is forecast to post some gains, although metrowide vacancy will edge tighter.

“Office investors will continue to target assets in Los Angeles County this year, though sales activity will likely remain measured due to the intensified scrutiny from lenders,” says Scott Lamontagne, regional manager of the Los Angeles office of Marcus & Millichap.

Following are some of the most significant aspects of the Los Angeles Office Research Report:

· Office-using employment sectors are projected to add 2,000 workers, a 0.2 percent gain.
· Office construction is expected to total 1.8 million square feet in 2008, up from 590,000 square feet last year.
· Vacancy is forecast to end the year at 10.1 percent.
· Asking rents are projected to reach $35.16 per square foot by year-end 2008, a gain of 8.1 percent.
· Effective rents will climb 7.9 percent to $30.54 per square foot.

For a copy of the complete Los Angeles Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716