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Just two years ago, household names in tech, media and consumer products were on an office leasing spree in Playa Vista, a seaside sliver of Los Angeles' Westside in an area sometimes called Silicon Beach.
Nike took 100K SF, Google grew its 600K SF by another 53K SF, and Walmart leased 150K SF. Companies like Meta, Microsoft and Apple all had outposts in Playa Vista in recent years. With these deep-pocketed, big-name companies in the area, the office market seemed nearly invincible.
But after multiple rounds of layoffs at even the country's biggest tech firms, Playa Vista's office landscape is a different place.
In the first quarter, the submarket had an availability rate as high as 37.4%, by Savills' count.
“It’s going through a readjustment like most of the major markets, with the exception of Century City,” Newmark Senior Managing Director Jennifer Frisk said.
In Q1, West LA, along with Downtown LA and the Glendale-Burbank-Pasadena area saw a wave of sublease space hit the market, Newmark reported. West LA saw nearly 162K SF hit the market, a total fueled by Meta putting nearly 136K SF up for sublease in Playa Vista.
According to JLL, Playa Vista’s total inventory is approximately 4.6M SF — roughly on par with Westwood — and about 726K SF of that is vacant, which translates to a 30.4% vacancy rate for the submarket. Newmark pegs vacancy at 25.2%, just a bit above the 23.8% citywide average.
Space is still at a premium, with Class-A office asking rents at $6.32 per SF. Only Santa Monica and Century City rents are higher.
Frisk doesn’t expect that the elevated vacancy rates are the new norm for Playa Vista, especially given that the neighborhood will likely continue to be a hot spot for tenants needing bigger spaces.
“Playa Vista has historically been the Westside submarket that's really been able to accommodate the larger tech, media and entertainment users,” Frisk said. “There's only so many large blocks of space in Santa Monica.”
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