Market Thrives Despite Writers' Strike

Weiss explains that the businesses affected most by the writers' strike, such as the caterers, wardrobe firms, limousine services and the like, were not big users of office space. And the writers themselves are not big users of office space, with most of them working independently or in small studio offices that represent only a negligible amount of the studios' space.

With so many entertainment firms looking for space, and with few large blocks available, Weiss sees continued positive absorption for the Westside markets. "I can't give you an exact figure on how much net absorption it is going to mean, but it is definitely positive net absorption," the Madison Partners principal says.

Different brokerage firms report different figures for the total of Westside office space, depending on which markets they include in the definition of "Westside." Weiss estimates the total at about 50 million sf in the submarkets that constitute the Westside, such as Hollywood, Beverly Hills, Santa Monica, Century City and West Los Angeles. Recent market reports show the direct vacancy rate at less than 7% and availability under 9% for the dozen or so markets that make up the Westside, with asking rents for class A space above $4 and holding firm.

Although a few tenants outside of the entertainment industry have left the Westside for lower rates elsewhere, Weiss points out that certain Westside addresses are very important to entertainment firms, for a variety of reasons ranging from image to proximity to other entertainment firms. The bottom line, he says, is that most entertainment firms on the Westside are determined to stay there, can afford the rent and aren't likely to leave just to save on rent.

Leasing activity has slowed overall as a result of the subprime meltdown, Weiss says, but deals are still getting done, rents haven't dropped, and with vacancy still in the single digits and relatively little new construction under way, "Nobody is really that worried" about the Westside office outlook. Most of the space that is available, he adds, is in relatively small blocks. "There are not many choices for a tenant that needs 300,000 sf to 400,000 sf," he says.

Madison Partners is a boutique firm that is active on a variety of fronts: tenant representation, landlord representation, building sales and other facets of the business. "We see what happens on all sides of deals, and we get a really good view of what the world looks like," Weiss says. "When the partners get together, we all agree that the market has slowed, but there is still plenty of activity. There are still a lot of people out there looking for space and doing deals."