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SoCal Office Markets Lead Nation in Year-Over-Year Rent Growth
After a protracted period of economic expansion, Los Angeles and Orange County ranked as the top two office markets nationwide for year-over-year rent growth, according to CBRE’s latest research report.
Los Angeles led with 11.1% growth, and Orange County followed closely behind at 10.8%. Sustained investor confidence, new construction, renovation, and the return of high quality product across the region all contributed to the increased growth.
Los Angeles County’s growth was boosted by suburban submarkets, led by West Los Angeles, where average asking lease rates exceeded $5-per-square-foot. The delivery of more than one million square feet of new construction, as well as the return of some high quality product to the market during the year, drove the increase last year. The South Bay submarket increased 12% year-over-year.
Orange County asking lease rates increased since 2012, surpassing the previous peaks by 3.4%. Increased tenant demand for new and renovated Class A office space boosted growth. The 2.5 million square feet of new construction, plus 900,000 square feet of renovations, drove up the average asking lease rate in leading submarket South Orange County by 19% from year-end 2016 to $3.08-per-square-foot per-month.
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