Just saw a report that office vacancy in downtown LA hit 25% this quarter

I was reading a market report from CBRE this morning, and that number really stopped me. I remember when I first got into this business about 15 years ago, a 10% vacancy rate was considered high and a real problem for landlords. Now we're looking at a quarter of all office space just sitting empty. It makes me think about all those big, shiny towers we built, thinking they'd be full forever. I walked through the financial district last month and the ground floor retail is a ghost town, a lot of those little lunch spots are gone. It's a totally different world from when a Class A lease was the safest bet you could make. Has anyone else had to completely rethink their investment strategy because of numbers like this?

2 comments

2 Comments

beth_sanchez4717d ago

Man, that number is wild, isn't it? A buddy of mine runs a small property management company, and he had a client with a nice mid-size office building. They held on for two years, dropping the rent bit by bit, but the tenant still left. Now they're trying to get it rezoned for light industrial because they just can't see offices coming back to that level. It really shook his whole view of what a solid asset is.

abbyl4916d ago

Yeah, the whole "solid asset" idea is pretty much toast. It's like watching people try to turn a DVD store into a gym, just desperate. Guess we're all learning that nothing is safe from getting weird now.