Downtown’s leasing has been fueled in large part by activity from law firms. While some firms have relocated in order to upgrade the quality of their space, others continue to shed space in renewals. Gordon & Rees, for example, restructured its lease at U.S. Bank Tower (633 W 5th) and will now occupy just over 50,000 SF. Allen Matkins signed a 44,248-SF lease at 865 S Figueroa Street and will shed about 15,000 from the 59,613 SF it currently occupies at 515 S Figueroa. Similarly, McKool Smith Hennigan is downsizing from just over 44,000 SF at 865 S Figueroa and moving into 28,000 SF at 300 S Grand Avenue.
Munger, Tolles & Olsen LLP leased 152,301 SF at 2 Cal (350 S Grand Avenue). The law firm, and its 375 employees, will relocate from nearby 355 South Grand Avenue. A company spokesperson noted that the property’s walking distance to courts and its child-care center were key motivations for the move. Following the trend seen across the region, renovations to the property have paid off. The landlord, CIM Group has made renovations to the lobby and common areas. Even with this lease, the 1.4-MSF property still has over 680,000 SF available for lease. Additionally, the Federal Public Defenders Office renewed its 54,827-SF lease at 321 E 2nd Street in Little Tokyo.
Space consolidation and a high percentage of renewals translated into little net reduction in availability for the region in 2015. New deliveries in multiple submarkets also boosted availability a bit. Ultimately, availability was unchanged from year-end 2014, remaining at 17.9% Class A availability fell only slightly year-on-year, dipping by 0.2 pp to 19.3% Downtown Los Angeles has posted a 2.2 pp decline in its Class A availability rate in 2015, but it still remains quite elevated, ending the year at 21.5%