LA Offices at the Top are Going Empty

LaTi reports:

Penthouse floors are vacant in some of the best office buildings in Los Angeles County, a sign of the troubled economic times and the gulf between asking prices and what tenants are willing to pay.

The chief executives at Atlantic Richfield Co., the oil company once based in Los Angeles, ran their international empire from some of the most regal corporate offices ever created in Southern California.

With Arco's 20-foot ceilings, dark wood paneling and private rooftop helipad, "this was corporate America as people thought of it," said Kent Handleman of Thomas Properties Group Inc., the building's landlord.

That was then. Nowadays, the landlord can't find a renter...

There are also plenty of other catbird seats for choosy chief executives to pick from. Penthouse office floors with drop-dead views are vacant in some of the best office buildings in Los Angeles County, a sign of the troubled economic times and the gulf between what landlords think their top-shelf product is worth and what tenants are willing to pay...

A survey by real estate brokerage Jones Lang LaSalle found a score of tall buildings downtown and on the Westside where the penthouses are vacant. In several of these buildings, the floors just below are also empty.

For instance, the two uppermost (23rd and 24th) floors of a high-rise at 10960 Wilshire Blvd. last occupied by Sony Entertainment are connected by a grand curved staircase, said real estate broker Hunt Barnett, who is trying to find tenants for the space.

Obviously, there are two different views of what will happen to the market in the not too distant future. Landlords expect rates to climb, prospective tenants don't think that's going to happen.

When the Fed starts printing again the rates will climb, so anyone considering more office space should lock in current rates long-term, if you can get a solid deal. What's a solid deal? At least a 25% discount from the highest rate paid by other tenants during the boom years.