Deck from Michael Soto – Research Director, Southern California Region at Savills
Read Date: 10/2020
- Leasing activity remains low, declining 18% in Q3 from Q2 2020
- Most occupiers are continuing to put long-term real estate decision-making on hold with short term extensions accounting for many of the leases that did close in Q3
- Expect leasing demand to continue to be low as the path of the virus and a timetable for a vaccine remains uncertain and companies announce WFH into 2021
- Overall availability increased 160 basis points over Q2 to 20.1% in Q3, marking the highest level of availability seen market-wide since 2012
- One good sign is that LA County unemployment rate dropped to 16.1% in August from a high of 20.9% in May
- While average rental rates have not experienced a widespread decrease as of yet, pressure is building as landlords increasingly become more aggressive in attracting and retaining tenants
- With Hollywood studio production slowly re-opening, cautious optimism within the entertainment/media sector is expected, although full-scale film production is not likely to commence until the beginning of 2021 at the earliest