Technology and Media Firms were boom for the Los Angeles office market in Q4 2018

The Century City office market ended 2018 on a high note, driven by large deals from tech and media companies in Hollywood on the Westside.

“Major media developers” including Netflix and Amazon Studios leased upwards of 2 million square feet in the 4th Quarter 2018, according to CBRE’s Greater L.A. Q4 report. Netflix signed the largest deal, starting with a 330,000 square foot lease at Hudson Pacific Properties’ building in Hollywood in October 2018. A month later it signed a 360,000 square foot lease at Kilroy Realty’s Academy on Vine Street. The streaming service giant renewed another 420,000 square feet in the 4th Quarter 2018, as well.

Los Angeles development was also very heavy in the 4th Quarter 2018. There was 3.5 million square feet of office space under construction, the most since the beginning of 2008.

Overall, vacancy in Los Angeles primarily remained the same, going from 14.2 % in the 3rd Quarter 2018 to 14.1% in the 4th Quarter 2018.

West LA recorded a vacancy rate of 11.4 percent while Century City’s vacancy rate was 7.1% showing an increase in popularity.

CBRE predicted that demand in the West L.A. and Hollywood markets would drive tenants to Burbank, El Segundo, or the Arts District, in search of Class A and creative office space.

Tenants are also scooping up space at new construction buildings, with pre-leasing commitments at 37 percent.

Office vacancy to steadily drop through 2019 because net absorption this year matched average gains over the last five years.