DTLA Office Market Continues to Strengthen

LOS ANGELES—Executive Office for New Immigration Review renews its 72,200-square-foot office lease at the City National Bank Building in Downtown Los Angeles. The five-year lease transaction is valued $11.7 million, roughly $2.70 per square foot, showing that the office market in downtown is continuing to strengthen.

After looking at alternative options, the tenant decided to stay in the fully occupied building. “It is a central and efficient location that fulfills their service needs,” John Anthony, senior managing director at the Charles Dunn Co., tells GlobeSt.com. “The building also offers great access to additional parking and public transportation at Pershing Square.” Anthony represented the tenant in the transaction along with his colleagues Chris Giordano and Chris Steck. EOIR has been a long-term tenant in the building.

Located at 606 S. Olive Street in Downtown Los Angeles, the building has 291,000 square feet. The new lease value shows that prices in the market are getting stronger. “The rate represents where we are making deals in the building in today's market,” says Anthony. “The market continues to strengthen. As vacancy continues to steadily decline, landlords have increased rental rates with the increased demand.”

Driven by the growing demand and increased rental rates, office development has begun to take off. The market has 1.3 million square feet of office space under construction, one of the highest office development areas in the greater Southern California market. While the office market has a 19.4% vacancy rate, things are improving, and the market has had three straight quarters of positive absorption.