LOS ANGELES-The Los Angeles Studley Report for the third quarter shows that vacancy rates for traditional office properties in Los Angeles have remained stagnant again as they have for the past seven quarters. Overall, vacancy rates for office properties stand at 19.4% and 20.6% for class-A properties.

“Given the uncertainty in the broader economy and the ample opportunities available to tenants, landlords are eager to retain tenants,” says Mike Catalano, Studley EVP and branch manager of the firm's West Los Angeles office. “This mindset dovetails perfectly with companies' hesitancy to take on the additional expenditures associated with relocations.”

Regional leasing activity remained relatively stagnant as well, down .4% from the second quarter with lease renewals currently dominating the market. Rents for class-A properties increased slightly from $29.98 to $30.10. The report, however, notes that this number may be skewed due to large concession packages offered in many higher-end submarkets. Considering concession packages, the report places rents for class-A under $30.00 and overall rents at $28.93.

The sluggish market is surprising considering the growth in the creative office sector. Last week a third quarter report from Industry Partners showed that vacancy rates for creative office on the Westside had dropped below 11% for the first time since 2008. Rental rates in the creative market are also up, even in Santa Monica where asking prices are above $4 per square foot.

“While the creative sectors have been steadily absorbing space, Los Angeles' traditional professional and business services industries continue to streamline operations,” says Mark Sullivan, Studley EVP and Southern California regional manager. “The Downtown office market, which depends on demand from the traditional users of office space, has been particularly affected.”

The report predicts that this stagnancy will continue as former class-A users relocate to industrial space. Although that means vacancy rates will decrease slowly, this is a great position for tenants looking to sign long-term leases as it provides ample opportunities.