Vacancy Grows in Downtown Office Market
Los Angeles Downtown News
By Ryan Vaillancourt
... As the economy continues to slump, business owners and consumers are always on the lookout for indicators that the worst is over. Those searching for bright spots shouldn't focus on the Downtown Los Angeles office market. Vacancy in Downtown high-rises inched up to 14.6% in the third quarter, compared to 13.1% during the same period in 2008, according to the 2009 Casden Forecast Industrial and Office Report, recently released by the USC Lusk Center for Real Estate. Expectations for the future are dark...
..."I think the next two years are going to be very tough for the office market," said Richard Green, director of the Lusk Center and a co-author of the study. "Downtown L.A. is doing a little better than other sub-regions but it's not immune. You have things like law firms laying people off, so when their lease rolls over they'll need less space." The overall economy has shown signs that the recession may be easing, namely U.S. Labor Department data that the national unemployment rate dropped in November, from 10.2% to 10%. But that doesn't hint at an imminent turnaround in office markets, which are considered lagging indicators, Green said.
"It's the economy, then jobs, then office, in that order," Green said. "We'll have to see whether that [unemployment news] sticks, but it's not until jobs start growing - it'll be six months after that before the office market picks back up."...