The Los Angeles office market are continuing to boom and veteran developer Jerry Snyder is taking advantage of the growth.
Snyder stated that, at the moment, he is focusing solely on offices and he knows what he’s talking about. His new developments are worth a combined $500 million.
Two developments are being completed in Hollywood and the third is a 12-story tower being planned for a site behind his SAG-AFTRA Plaza on Wilshire Boulevard in the Miracle Mile district. Some of Snyder’s new tenants in Hollywood are the film production company Broad Green Pictures and post-production sound company Formosa Group.
“Tenant interest has really picked up since the first of the year,” Snyder said. “I think people were kind of waiting to see what would happen with the election.”
According to The Los Angeles Times, “Big office leases by such companies as Warner Music Group, City National Bank and Kite Pharma helped soak up 2.1 million square feet in Los Angeles and Ventura counties, the most in a quarter since 2000, brokerage CBRE Group Inc. said.”
Petra Durnin, director of research and analysis at CBRE stated that the disappearance of the empty space means that landlords will have the upper hand in the future when it comes to negotiating leases with tenants.
“We’re still in growth mode,” Durnin said. “The only challenge is that it has been a long recovery, so investors and occupiers are preparing for the end of the cycle. But 2017 will be a strong year for both leasing and sales.”
The Los Angeles office market is continuing to be driven by entertainment companies such as Netflix, Amazon, Hulu, Youtube, Snapchat, and Buzzfeed. Real estate broker Tony Morales of JLL says that the melding of Silicon Valley and Hollywood is beginning to play out in L.A.
“Bay Area tech companies are trying to get a media component,” Morales said. “Tech with content is a unique hybrid here.”
According to the Los Angeles Times, “Although 2017 looks strong, Morales predicts a lull in leasing in 2018 and 2019 because that period will mark a decade since the financial crisis and resulting recession slowed the market to a crawl. Big leases commonly turn over after 10 years and put tenants back on the market, so fewer leases than average will turn over.”