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Strong transaction activity in the Los Angeles office in Q2 – Head of Commercial Real Estate

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Office transaction volume in Los Angeles was just over $1 billion in the second quarter of this year, flat from the previous quarter. CommercialEdge. Investment activity in the metro remained strong, with Los Angeles recording $2.3 billion in office sales for the entire first half of 2021—more than double the $1 billion in the first half of 2021.

More than 2 million square feet of office space was sold during the second quarter, with the amount split between the core urban (566,000 square feet), secondary urban (540,000 square feet) and core suburban (914,400 square feet) submarkets. A single property of 27,000 square feet was sold in the CBD area, while three properties totaling 87,700 square feet were sold in secondary suburban submarkets. Suburban markets remained a focus for investors, while creative office assets continued to trade at a premium.

With $2.3 billion in office transactions in the first half of the year, Los Angeles remained one of the top metros for sales. Most gateway markets recorded lower transaction volume, but Manhattan ($2.8 billion) and Boston ($2.5 billion) fared better than Los Angeles. Chicago ($1.8 billion), San Francisco ($1.1 billion) and Miami ($995 million) saw less activity in the first half of 2022.

The price per square foot in Los Angeles has continued to rise steadily. Average office transactions in the first half of June reached $493, ​​up 27.4 percent from the previous quarter and up 27.0 percent from a year ago.

Creative investment in the office at a premium

It became the largest office transaction of the quarter The sale of 555 S. Aviation Blvd for $206 million. in El Segundo. Subsidiary company FS Credit Real Estate Income Trust purchased an asset from Tishman Speer. The seller originally purchased the property in 2015 — then a repair and distribution facility — for $45 million and converted it into a 259,754-square-foot creative office. The asset traded at $793 per square foot, well above the metro average.

Newly Renovated Office for Sale in Thousand Oaks Submarket—Harkham Ventures bought an asset from 2625 Townsgate Road for $35.1 million from Lineage Trust. The 132,037-square-foot creative office was renovated in 2001 and includes more than 1,200 square feet of retail. JLL Capital Markets represented the buyer and secured a $21.1 million acquisition loan.

Another significant office sale occurred in Culver City. Nuveen Real Estate bought apple-leased 5500 W. Jefferson from Hackman Capital Partners for $105.5 million. The 75,000-square-foot creative office property was one of the most expensive properties on a per-square-foot basis at $1,406.

CommercialEdge covering 8 million+ property records in the United States. See the latest monthly report from the CommercialEdge national office here.

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