The core consumers of L.A. office space–banks, law firms and the professional/business services sector–have remained cautious and focused on cutting costs, according to the Studley Office Market and Spacedata Report. That’s caused certain submarkets, particularly downtown and Century City, to have “a great deal” of excess space.
While the media, entertainment and tech sectors have been active and expanding due to strong domestic and global demand for their products, the financial, legal and real estate sectors are still restructuring. Some major companies in the L.A. market, including Wells Fargo, KPMG and AIG, are in the throes of national or global consolidation campaigns.
But the L.A. market has yet to see a resurgence of regional and local banks rushing in to capture market share, Studley says. L.A. has also failed to see an influx of national companies electing to set up or expand operations. Instead, its tenant base is slowly eroding because of a net loss of businesses to such areas as Colorado and Texas that offer lower state taxes and extensive incentives.
Office Market and Spacedata Report
Heart of Hollywood