Los Angeles Office Market Report

Positive leasing momentum overshadowed by substantial batch of available space. Los Angeles County enters 2023 with all-time high vacancy and nearly 74 million square feet of office space unaccounted for, daunting conditions for the nation’s fourth-largest market by stock. As companies continue to adjust their space needs to accommodate work schedules that often require employees to be in the office at least three days a week, the volume of vacant space is expected to further increase this year. Still, some silver linings exist. Downtown and West Los Angeles, the two largest submarkets by inventory, recorded several quarters of positive absorption last year, suggesting demand among professional services and tech firms is mildly improving. Furthermore, the volume of 25,000-square-foot-plus lease executions metrowide has remained consistent since the lifting of pandemic-related restrictions, with a fair number of recent commitments carrying terms of 10 years or longer. An additional aid in the metro’s recovery, just one-fourth of the space slated for 2023 completion was available for lease as of late last year, suggesting supply-side pressure will be moderate over the near term.