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Downtown Long Beach Office Space Shrinking As Companies Vie for More Square Footage

Posted on: Thursday, 17 May 2007, 12:00 CDT

On the heels of being recognized as one of the nation's Top Ten Turnaround Downtowns by the Urban Land Institute, it seems Downtown Long Beach is also where many companies want to do business. According to findings released last month by commercial real estate firm Cushman & Wakefield, the company's 1st Quarter 2007 Office Building Market Survey showed a positive absorption of 66,722 square feet for direct space from the previous quarter and a 4% increase in the average asking of rental rates.

Vacancy rates in Downtown Long Beach have fallen during the past four years while lease rates continue to rise. According to the market survey conducted by Cushman & Wakefield, overall occupancy rates for the 1st Quarter were 90.81% leased. Office space is divided into three categories: Class A, Class B, and Class C. According to the survey conducted by Cushman & Wakefield, Downtown Long Beach's Class A buildings, which are characterized as having excellent locations, premium improvements, as well as amenities, and attract major corporations looking for larger floor plate designs, are currently 90.5% occupied and were neutral in the 1st quarter. Class B buildings, which are described as having smaller floor plate designs and tend to offer fewer on-site amenities, had gains totaling nearly 60,000 square feet. Class C buildings, which are typically 40-plus years old with even smaller floor plate designs and may lack some of the amenities, had gains totaling approximately 6,000 square feet. Plans to convert some of these older buildings into stylish residential lofts are seriously being considered, which could further create an even higher demand for premium office space in this waterfront community.

"Companies realize the value and convenience of having offices in Downtown Long Beach," says Kraig Kojian, president and CEO of Downtown Long Beach Associates (DLBA), the non-profit organization operating on behalf of tenants and commercial property owners in the Business Improvement District. "Our seaside location situated between Orange County and Downtown Los Angeles is ideal; plus, overall rents are more competitive compared to the county average. Also, public transportation makes the area easy to access via the Metro Blue Line and Long Beach Transit provides free shuttle buses to transport people within the Downtown adding to the convenience for commuters to the urban center."

Cushman & Wakefield's market survey also revealed a strong retention rate for existing tenants, as well as continued interest from office tenants new to the Downtown Long Beach area.

According to Robert Garey, senior director of Cushman & Wakefield, "Downtown Long Beach is experiencing its most positive market conditions since the late 1980s with the trends pointing towards a tighter market and increasing rental rates. The investment in new housing options and retail amenities is attractive to tenants looking for space in this submarket which offers spectacular ocean views."

For the entire South Bay market, of which Downtown Long Beach is part of, overall absorption for the first quarter totaled 428,658 square feet, which has more than doubled the fourth quarter of 2006. Several enterprises, such as Molina Medical, THUMS, Occidental Petroleum and Holthouse Carlin & Van Trigt LLP, added additional space in existing buildings or have relocated within the Downtown Long Beach market. UTi, which committed to two floors in the 100 Oceangate building in the heart of Downtown Long Beach's West Gateway District, was the largest company new to the market.

Statistics from Cushman & Wakefield's report shows that of the nearly 4 million square feet of office space in Downtown Long Beach, there was only a 10.2% vacancy rate. The average office lease per month is $2.05 per square foot, which is lower than Los Angeles County's overall average of $2.11 square foot.

The DLBA is a non-profit organization operating on behalf of the property owners and tenants of the Business Improvement District. It is dedicated to the management, marketing, security, maintenance, advocacy, economic and community development of the assessment districts in cooperation with the City of Long Beach and the private sector.

For information on available office space in Downtown Long Beach, please contact the DLBA at 562.436.4259 or visit online at www.downtownlongbeach.org.

Image Available: http://www.marketwire.com/mw/frame_mw?attachid=493617

 Contact: Elizabeth Borsting 562.856.9292  

SOURCE: DLBA

Source: MARKET WIRE

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