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Market Report

Los Angeles Office Market Report

2Q 2023

Elevated Vacancy Overshadows Consistent
Tenant Demand in Lower-Cost Areas

Silver linings present amid historic conditions. Los Angeles’ office sector is navigating a challenging time. Entering April, CBD and suburban vacancy were at all-time highs, as was availability across property classes, equating to a vacant office stock of more than 75 million square feet. Nevertheless, some encouraging dynamics are emerging. Positive net absorption has been recorded during two of the past four quarters, with four of 13 submarkets noting a decline in availability over that span. Unfortunately for the metro, this foursome — Mid-Cities, Southeast Los Angeles, Santa Clarita Valley and Antelope Valley — comprises less than 10 percent of the total office stock. Outside of these areas, however, speculative development is restrained, with two-thirds of the active pipeline accounted for. This may aid submarkets with historically high vacancy, including Downtown Los Angeles, where the rate sat at nearly 22 percent in March.
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