Los Angeles Market Update: Deal Volume Slowly Grows M-o-M

In June, the value of office sales in metro Los Angeles reached $167 million, as nine properties totaling 523,885 square feet changed hands, CommercialEdge data shows. Deal volume increased 6 percent month-over-month, as five properties had traded in May for $157 million.

By the end of the second quarter, office sales in metro Los Angeles had generated $1.1 billion in revenue, as 2.9 million square feet of space traded. Year-over-year, sales volume dropped by 21 percent, with the first two quarters of 2020 clocking in $1.4 billion in office space traded (or 3.6 million square feet).

The average price per square foot reached $388 in June, down 3 percent from the previous month ($400). Investors are targeting safe, stabilized assets for their portfolios, or value-add redevelopment opportunities, as uncertainty still looms over the metro’s office recovery, with vacancy slowly improving. Out of the nine properties that traded in June, only one was Class A. All nine assets were completed before the 2000s.

The Torrance submarket recorded the most activity in June (totaling $72 million), as well as the largest sale of the month. This was Kingsbarn Realty Capital’s $45 million acquisition of Gramercy Plaza, a 157,641-square-foot office located at 2050 W. 190 St. The company will offer investment interests in the property in a Delaware Statutory Trust structure.

However, the highest price per square foot in the market was $661.5, paid by KHP Enterprises for a 28,345-square-foot office at 415 N. Crescent Drive in Beverly Hills. DIICO Properties sold the asset for $18.8 million. A variety of healthcare providers occupy the building.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.