Nick Griffin

After several years of slow growth, the office market in Downtown Los Angeles has finally hit is stride. According to the recent report from the DCBID, the office vacancy rate has decreased by 3.4% year-over-year to 17%, a significant milestone for the submarket. In addition, rents have increased 5.3% year-over-yea to $3.66 per square foot for class-A space, leasing activity is up 25% year-over-year to 2.3 million square feet year to date and absorption for the third quarter was up 486% with 230,000 square feet of net absorption.

“You are really seeing a tipping point with office,” Nick Griffin, executive director for the DCBID, tells GlobeSt.com. “I have been predicting for several quarters now that we were going to see an acceleration similar to markets that I saw in New York several years ago, where all of the sudden absorption goes right through the roof. It is a combination of perception and reality. The market for office tenants in general is strong. There is strong corporate growth and quite a few sectors that are growing a lot, whether it is tech, media or fashion. Once the perception shifted about Downtown Los Angeles and about what it is like to office here, there has been a real acceleration. We are only seeing the beginning of that.”

In fact, Griffin expects rapid office growth in the next year with strong leasing activity and a decreasing vacancy rate, despite new deliveries. “I hate to make overly bold predictions, but I think that we are going to see the vacancy rate nose down in this coming year more significantly than we have before,” he says.