LOS ANGELES—High-technology companies have accounted for 20% of the major national office leasing this year, according to a new report from CBRE. Los Angeles is in the top 10 cities, ranked ninth overall, to see significant rent growth as a result of the strong presence of technology companies and technology job growth.
While Los Angeles is ranked in the top ten, the L.A. submarket of Santa Monica, which is the city's largest technology market, ranks fourth in the country for rent growth. In the second quarter of this year, the market had per-square-foot rents of $57 annually and a vacancy rate of 7.5%. By comparison, the L.A. market generates $32 annual rents per square foot with a 16.8% vacancy.
NationalBuilder signed the largest office lease so far this year for 54,800 square feet at 520 S. Grand Avenue. Butterfield Productions and BuzzFeed also signed significant leases. Butterfield Productions signed up for 42,300 square feet at 1950 Sawtelle Ave., while BuzzFeed comes in third with a 40,000-square-foot lease at 6322 De Longpre Ave.
The report also found that tech companies are starting to migrate to the downtown market both because of the revitalization and for the lower rents. There is also significant creative office development in the downtown market, including ASB Real Estate Investment's $62.5 million redevelopment of five warehouses in the arts district and Atlas LA 4th Street's plans to convert the former Coca-Cola warehouse into creative office space. Aside from Santa Monica, other top L.A. markets include Westwood, Culver City and the South Bay coastal markets.
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