The Class A office availability rate in Los Angeles fell from 19.5% to 19.2% in the first quarter of 2015, while overall availability remained steady at 18.0%. Strong leasing activity over the last six months totaled 10.1 million square feet, the best two-quarter period in years. Asking rents increased 1.7% overall and 1.5% for Class A properties. West Los Angeles submarkets saw sharp quarterly declines in availability rates and continued rent growth above other areas of LA County.

1. Savills Studley Report
Los Angeles office sector Q1 2015
Savills Studley Research
Los Angeles
SUMMARY
Market Highlights
CLASS A AVAILABILITY RATE FALLS
The overall availability rate was essentially
unchanged in the first quarter, averaging
18.0%, but the rate fell from 19.5% to
19.2% in Class A properties. The Westside
registered sharp quarter-on-quarter declines
in Class A rates in Hollywood (down by 1.9
pp to 12.1%) and Fox Hills/Marina (down by
1.6 pp to 19.9%).
STRONG LEASING ACTIVITY
Tenants have leased approximately 10.1
msf over the last six months – the strongest
two-quarter total in several years. Steady
demand among entertainment, media and
tech firms has been supplemented by
increased activity in the legal and education
sectors.
RENTS CONTINUE GROWTH
Overall asking rents continue to trend
upwards, rising by 1.7% quarter-on-quarter
from $30.50 to $31.02. Class A asking rents
rose from $31.64 to $32.12, increasing by
1.5%.
“Newly constructed and renovated
creative office spaces have enjoyed
strong demand from both tenants
and investors. Developers are
scrambling to find buildings that are
suitable conversion candidates.”
Mike Catalano,
Executive Vice President

2. 02
Savills Studley Report | Los Angeles
Active Start to 2015
Availability rates in the Los Angeles office
market have been falling at a slower pace
in the last three quarters. The overall rate
was essentially unchanged in the first
quarter, averaging 18.0%, but the rate fell
from 19.5% to 19.2% in Class A properties.
Nevertheless, the 10.1 msf leased in the
last two quarters represents the strongest
two-quarter total in several years. Although
entertainment, media and tech firms have
accounted for many of the relocations and
expansions, market activity has also been
boosted by increased demand from law
firms, educational institutions and a few
financial services companies.
While very few law firms are increasing
the size of their lease commitments, they
have recently become more active. The last
few months have brought a flurry of law
firm deals in Century City, including those
finalized by Irell & Manella (125,250 sf at
1800 Avenue of the Stars); Milbank, Tweed,
Hadley & McCloy (56,527 sf at 2029 Century
Park East); and Polsinelli Shugart (56,514
sf at 2049 Century Park East). Additionally,
Singer, Wolf, Goldman & Holtz; Covington &
Burling; and Hecker Law Group have signed
mid-sized leases in Century City.
Entertainment and Marketing
Firms Lead Leasing
Media and entertainment companies still
account for many top deals and a number
of this quarter’s leases were renewals.
In Burbank, Nickelodeon signed a new
lease and renewed another at 203 W.
Olive Avenue (113,760 sf) and 3000 W.
Alameda Avenue (108,410 sf), respectively.
At nearby 2900 W. Alameda Avenue, CBS
Interactive and the Writers Guild leased a
combined total of 66,378 sf. Cast & Crew
Entertainment renewed a 70,230-sf lease
at 2300 W. Empire Avenue and CBS Radio
took 63,954 sf at 5670 Wilshire Boulevard
in the Miracle Mile. Not all of the deals
signed are indications of growth in the
entertainment sector. As DreamWorks
Animation SKG continues to cope with
repercussions from sharp $263.2-million
losses during the fourth quarter of 2014, the
film maker sold its 497,403-sf headquarters
to SunTrust Bank for $185 million and then
leased it back through 2035. The new
owner quickly put the property back on the
market. The fully leased campus is expected
to attract strong interest from institutional
investors.
As the broader U.S. economy gains
traction, consumers are spending more
on durable goods such as electronics and
mobile phones, as well as automobiles and
Source: Bureau of Labor Statistics
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-9.0%
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Millions
L.A. Office Emp. L.A.(% Ann. Change) U.S.(% Ann. Change)
Office-Using Employment Trends
$32.12$30.74
$26.89
$24.34
$0
$5
$10
$15
$20
$25
$30
$35
$40
2015 1Q2014 1Q2013 1Q2012 1Q2011 1Q2010 1Q
($/sf)
Rental Rate Trends
Class A Class B & C
Asking Rent Trends
19.2%
20.9%
14.7%
17.6%
0%
5%
10%
15%
20%
25%
2015 1Q2014 1Q2013 1Q2012 1Q2011 1Q2010 1Q
(%) Availability Rate Trends
Class A Class B & C
Availability Rate Trends

3. savills-studley.com/research 03
Q1 2015
Tenant Sq Feet Address Market Area
Dreamworks Animation* 497,403 1000 Flower St Glendale
Beachbody Holdings 132,920 3301 Exposition Blvd Santa Monica
City of Los Angeles 125,591 350 S Grand Ave Downtown LA
Irell & Manella LLP 125,250 1800 Ave of the Stars Century City
Southern California Edison 125,000 2 Innovation Way San Gabriel Valley
Nickelodeon 113,760 203 W Olive Ave Burbank
Nickelodeon 108,410 3000 Alameda Ave Burbank
Eurofins Scientific 100,000 931 Corporate Center San Gabriel Valley
USC School of Social Work 80,047 1149 S Hill St Downtown LA
Cast & Crew Entertainment 70,230 2300 W Empire Ave Burbank
Sum of Top 10 Leases 1,478,611 Sum of 1st Quarter Leasing Activity 5.8 MSF
household appliances. In turn, advertising
and marketing companies are seeing
some increased demand for their services.
Omnicom leased 60,000 sf at 12777 W.
Jefferson Boulevard. Ignited Minds signed
a 52,282-sf lease in the South Bay. Finally,
in Santa Monica, Beachbody Holdings
renewed 132,920 sf at 3301 Exposition
Boulevard.
Rents Push Higher, Particularly
in West Los Angeles
Regional asking rents continued to trend
upward, rising by 1.7% quarter-on-quarter
from $30.50 to $31.02. Class A asking rents
rose from $31.64 to $32.12, increasing by
1.5%. The West Los Angeles submarket
continues to outpace the others in Los
Angeles County. Class A asking rents in
West Los Angeles have spiked by 10.3%
year-on-year to $47.11. In contrast, rents in
submarkets outside West Los Angeles, such
as the San Fernando Valley and Downtown,
have registered much more modest growth.
As pricing in Santa Monica and surrounding
areas increases, creative-sector tenants
requiring bigger blocks of space continue
to migrate to Playa Vista and El Segundo.
Yahoo will move to Playa Vista, taking
400 jobs to a 131,592-sf building at the
Collective at Playa Vista. The company
will keep its space in Burbank. Harmony
Inc., the parent company for eHarmony,
signed a 10-year, 50,568-sf lease for the
top four floors at 10900 Wilshire Boulevard
in Westwood, where it received building
signage. The dating site will relocate its
office space from 64,000 sf at Colorado
Center.
Scramble to Build Creative
Space
Newly constructed and renovated creative
spaces have enjoyed success. Bixby
recently signed Sanrio, creator of the
popular Hello Kitty character, to a 28,584-sf
lease at 2101 El Segundo Boulevard. Bixby
has pushed occupancy at the property to
nearly 80% just a year after it completed
renovations. El Segundo has emerged in the
last two years as an attractive alternative
for creative-sector companies priced out of
Santa Monica or Playa Vista. The market has
a growing number of creative-sector office
options and tenants and an expanding labor
pool near South Bay Beach communities.
Several developers in Downtown Los
Angeles are hoping to emulate Bixby’s
recent success. Realty Partners acquired
Figueroa Courtyard, a five-building, 270,169-
sf park near the Bunker Hill Financial District.
The buyer expects to reconfigure the park,
where the buildings are currently 72%
leased, as creative office space.
Investors Paying Top Dollar for
Select Properties
The gross value of office property sales in
Los Angeles dropped slightly in 2014, falling
from $9.7 billion to $7.9 billion. Cap rates fell
from an average of 6.5% to 6.0%. Premium
properties, superior locations and steady
cash flow are commanding even lower cap
rates. The Reserve in Marina Del Rey, for
example, sold for $316 million ($791.24/sf)
with a reported cap rate of 4.3%. Newport
Beach's Invesco Real Estate bought the fully
leased 399,373-sf building from Shorenstein
Properties and Worthe Real Estate Group.
Fully leased creative office space properties
with elevated occupancy are selling at
prices that are more than double the market
average. Los Angeles-based IDS Real Estate
Group paid $108 million ($847.71/sf) for the
Beats by Dre complex in Culver City. Beats
by Dre leases two of the three buildings in
the complex, and digital marketing company
Steelhouse leases a smaller 17,600-sf
property. Prior to renovation costs, the
seller, Hackman Capital Partners, paid $25.3
million for the Beats by Dre buildings in 2007
and $2.3 million for the Steelhouse property
in 2012.
Rents have recovered in Santa Monica and
surrounding areas, but remain well below
pre-recession peaks in most other areas
including Tri-Cities and Downtown. Value-
add investors, in turn, see a strong upside
in assets that have below-market rents and
imminent lease rollovers. Properties that
were acquired in the last market peak (2006
to 2008) are still selling at a discount to pre-
recession pricing. In late 2014, for example,
505 N. Brand Boulevard sold for $83 million
($200/sf). The seller, LaSalle, divested the
property at a 20% discount from the $109
million it paid in 2005.
Availability Rate Comparison Overall Rental Rate Comparison
Major Transactions
$52.02
$50.78
$48.73
$47.20
$42.88
$42.10
$36.82
$35.29
$35.25
$34.78
$33.15
$31.02
$30.04
$29.80
$29.45
$28.99
$27.07
$25.72
$25.71
$25.66
$25.40
$25.30
$24.89
$24.67
$24.50
$24.47
$22.44
$20.52
$41.37
$30.96
$27.85
$0 $10 $20 $30 $40 $50 $60
Century City
Beverly Hills/W.Hollywood
Santa Monica
Westside
Westwood/West LA
Hollywood
Miracle Mile
Fox Hills/Marina
Burbank
Downtown LA
US Index
Los Angeles Region
Tri-Cities
Pasadena
Glendale
N.Hwd/St.City/Univ. City
South Bay
South Bay Area
San Fernando Valley
Santa Clarita Valley
West San Fernando Valley
Central San Fernando Valley
Long Beach
Airport
San Gabriel Valley
Wilshire District
Park Mile
Mid-Wilshire
New
Existing Direct
Sublet
($/sf)
Type
8.8%
12.7%
12.8%
12.9%
13.4%
13.6%
14.3%
15.0%
15.2%
15.5%
15.5%
15.6%
16.3%
16.6%
16.9%
17.0%
17.1%
17.5%
18.0%
18.0%
19.2%
20.9%
21.2%
22.7%
22.8%
23.7%
24.2%
28.0%
0% 5% 10% 15% 20% 25% 30%
Hollywood
Westwood/West LA
Beverly Hills/W.Hollywood
San Gabriel Valley
N.Hwd/St.City/Univ. City
Santa Clarita Valley
Central San Fernando Valley
Long Beach
Westside
Miracle Mile
Santa Monica
Century City
San Fernando Valley
Burbank
Pasadena
US Index
Tri-Cities
West San Fernando Valley
Los Angeles Region
Glendale
Fox Hills/Marina
Wilshire District
Downtown LA
Park Mile
South Bay Area
Mid-Wilshire
South Bay
Airport
(%)
*Sale-leaseback

4. Savills Studley Report | Los Angeles
04
Map Submarket Total
SF
(1000's)
Last
12 Months
This
Quarter
%
Change
from
Last Qtr.
Year
Ago
This
Quarter
pp
Change
from
Last Qtr. (1)
Year
Ago
This
Quarter
%
Change
from
Last Qtr.
Year
Ago
Downtown LA 34,399 2,788 7,282 6.0% 7,003 21.2% 1.2% 20.4% $34.78 3.4% $30.98
Downtown LA - Class A 22,830 2,113 5,500 1.7% 5,423 24.1% 0.4% 23.8% $35.32 3.4% $31.67
Wilshire District 16,133 1,044 3,379 -2.5% 3,472 20.9% -0.5% 21.5% $24.47 0.1% $23.70
Wilshire District - Class A 13,183 925 2,955 -3.0% 3,006 22.4% -0.7% 22.8% $25.16 0.2% $24.43
Hollywood 4,433 456 388 -7.9% 411 8.8% -0.8% 9.3% $42.10 1.6% $38.95
Hollywood - Class A 2,249 393 272 -13.4% 313 12.1% -1.9% 13.9% $44.50 2.2% $40.72
Westside 51,292 6,080 7,805 -3.9% 8,436 15.2% -0.6% 16.4% $47.20 2.3% $42.67
Westside - Class A 46,364 5,316 7,356 -4.8% 7,853 15.9% -0.8% 16.9% $47.11 2.2% $42.70
South Bay Area 34,938 1,883 7,962 1.7% 8,081 22.8% 0.4% 23.1% $25.72 1.0% $25.16
South Bay Area - Class A 24,053 1,418 5,532 0.7% 5,558 23.0% 0.2% 23.1% $25.32 0.9% $24.66
San Fernando Valley 32,480 2,196 5,286 -0.8% 5,346 16.3% -0.1% 16.5% $25.71 0.0% $25.26
San Fernando Valley - Class A 21,970 1,613 4,042 1.6% 3,835 18.4% 0.3% 17.5% $26.53 -0.1% $26.55
Tri-Cities 25,187 2,203 4,307 -3.6% 5,007 17.1% -0.6% 19.9% $30.04 0.0% $30.19
Tri-Cities - Class A 18,605 1,739 3,344 -5.2% 4,044 18.0% -1.0% 21.7% $32.47 1.7% $31.98
Santa Clarita Valley 2,760 115 376 5.2% 395 13.6% 0.7% 14.3% $25.66 -2.0% $26.92
Santa Clarita Valley - Class A 2,081 95 320 4.6% 355 15.4% 0.7% 17.1% $26.62 -1.8% $27.61
San Gabriel Valley 11,402 659 1,475 9.4% 1,540 12.9% 1.1% 13.5% $24.50 0.6% $24.03
San Gabriel Valley - Class A 3,910 296 435 -6.1% 658 11.1% -0.7% 16.8% $25.37 1.1% $25.04
Greater Los Angeles Total 213,024 16,968 38,260 0.1% 39,691 18.0% 0.0% 18.6% $31.02 1.7% $29.29
Greater Los Angeles Total - Class A 155,245 13,516 29,755 -1.7% 31,046 19.2% -0.3% 20.0% $32.12 1.5% $30.48
8
9
1-9
2
3
4
5
6
7
Leasing
Activity
Available
SF
Availability
Rate
Asking Rents
Per SF
1
@SavillsStudleywww.savills-studley.com
Please contact us for further information
(1) Percentage point change for availability rates.
Unless otherwise noted, all rents quoted throughout this report are average asking gross (full service) rents psf.
Statistics are calculated using both direct and sublease information.
Short-term sublet spaces (terms under two years) were excluded.
The information in this report is obtained from sources deemed reliable, but no representation
is made as to the accuracy thereof. Statistics compiled with the support of The CoStar Group.
Copyright © 2015 Savills Studley
Savills Studley
Downtown Los Angeles
777 S. Figueroa Street
30th Floor
Los Angeles, CA 90017
(213) 553-3800
Director & Regional Manager
Mark T. Sullivan - EVP,
msullivan@savills-studley.com
License 00975518
5
101
60
2
6
3
5
2 1
Santa Clarita Valley
San Fernando Valley Tri-Cities
San Gabriel Valley
South
B
ay
A
rea
Wilshire District
Downtown LA
Hollywood
4
Westside
7
8
9
Savills Studley
West Los Angeles
10960 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
(310) 444-1000
Executive Branch Manager
Mike Catalano - EVP,
mcatalano@savills-studley.com
License 01759030