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The Los Angeles market overall posted a negative absorption in the fourth quarter of 2017, according to the office report from Newmark Knight Frank. West Los Angeles led absorption for the quarter, but Downtown still trailed behind in leasing activity. It is an interesting situation, because by all accounts, Downtown is on fire. It has strong fundamentals, development activity and multifamily and retail demand. Office, however, can’t seem to get going—even with Warner Music serving as a hopeful catalyst.

“What had traditionally been thought of as the Downtown office market, which is the high-rise office buildings, took a hit in a couple of different ways,” Steve Kolsky, EVP and managing director at Newmark Knight Frank, tells GlobeSt.com. “That is not the type of product that a lot of the tenants we have seen in Southern California are looking for. They don’t want to be in stoic high-rise buildings and taking multiple elevators to get to their floors. Even when you can make the space creative, which a lot of it has been converted into, it still isn’t a first choice. There is also a stigma to moving downtown People want to be in synergistic places with companies that they are doing good business with, and there isn’t a lot of that. ”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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