Century City Is L.A.’s Traditional Office Hub

Century City has become Los Angeles’ hub for traditional tenants. While landlords from West L.A. to Downtown L.A. to Hollywood are looking to attract creative tenants, Century City’s strong leasing activity is driven by traditional users, like professional services, legal and financial firms. According to new research from JLL, Century City has the tightest vacancy rate in all of Los Angeles at 6.8%, showing the strength of traditional office users.

“The demand for traditional, class-A office in L.A. can vary widely from submarket to submarket,” Evan Moran, VP at JLL, tells GlobeSt.com. “Downtown L.A. for instance has seen very little change in vacancy over the last 20-30 years. Century City is a completely different story even though the make-up of the tenant base is similar to DTLA’s from the outset. The differential in vacancy rates is driven by the business lines of those firms occupying space in the respective submarkets.”

While legal, financial and professional services firms are driving the leasing activity in the market, there are also more creative-leaning tenants as well. “When peeling back the layers of the onion we see that the business lines of the Century City firms are in many cases entertainment, tech, and media focused,” says Moran. “Being in close proximity to West L.A. clients is paramount in driving the office location.  In fact, a large share of the positive leasing activity in Century City, plus-250,000 square feet, over the last 24 months has been driven by firms with DTLA offices growing their West LA footprint for recruiting, business development and client retention.”

Century City now only has 10 floors of available space in the market. In 2014, the market had 50 full floors of available space, showing the momentum of leasing activity in the last three years. For tenants renewing leases, this has become a challenge. “With the Century City vacancy rate at an all-time low of 6.8%, tenants need to make sure they are working with a broker who knows every tenant’s status on every floor in the submarket, providing off-market opportunities and maximizing leverage,” adds Moran. “Also, get started early giving yourself enough time to explore all options.”

From the landlord perspective, however, the run-up has meant rapidly increasing rental rates. “With four of the top five class-A office projects in Century City boasting occupancy rates of +97%, landlords are more bullish than ever,” says Moran. “Current average asking rates in top-tier buildings are between $5.50-$6.50 per square foot per month full service, and in some instances as high as $7.75 per square foot per month full service.  As several multi-floor tenants continue to negotiate on the last multi-floor blocks of space remaining, there still may be some further growth in rental rates in 2019. With that being said, there is still great value to be had within the Century City submarket for tenants that are prepared, and equipped with the proper information.”