Prices for West side Offices continue to break new records. It is now common for class A west side office properties to break $800 per square foot. Recently, Douglas Emmet along with a sovereign wealth fund acquired for $1,100 per square foot 233 Wilshire Boulevard, a 129,000 midrise office building in Santa Monica. Rockwood Capital acquired a two and three story 200,000 square foot creative office building in Playa Vista for over $800 per square foot. Most of the buyers are both foriegn and domestic institutions and pension funds starved for yield. Cap rates are now at 4% on questionable numbers. The pricing trend is consistent with the asset bubble resulting from historically low interest rates.
On the other hand, many Westside markets have vacancies rates under the magic 10% where Landlords believe gives them a pricing advantage. Overall though, the Westside vacancy rate remains stubbornly above 13% due to new product in Hollywood and Playa Vista.