Los Angeles Top Office Sales Fell in 2018

Office transaction volumes and pricing declined last year. According to research from Yardi Commercial Café, Los Angeles office transactions totaled $948 million, a far cry from the $2.3 billion in office transactions in 2017. Slow job growth was one factor in the slow office investment activity. Los Angeles unemployment rate fell to 4.1% in the fourth quarter with total civilian job growth at 1.3%.

“The economy stabilized at virtually full employment,” Doug Ressler of Yardi Commercial Café, tells GlobeSt.com. “While there was a big drop-off in December, the market was consistently down over strong 2017 for number of sales. Total sales volume by dollar total, however, has stayed consistent, or even grown in some quarters.”

In addition to slow employment growth, office investors also reacted to macro economic trends. “Despite a plentiful supply of private capital, rising interest rates and stock market volatility affected investor confidence,” he explains. “The largest deal of the year was Hackman Capital’s $750 million acquisition of CBS Television City at 7800 Beverly Blvd announced in October,” says Ressler. “Hines sold Campus at Playa Vista for $335 million, or $1,031 per square foot to Chicago-based Heitman in November. In Pasadena, 18.4% of inventory traded in 2018, the highest percentage of the past six years. Overall, full year transaction volume dropped sharply compared with 2017.”