Los Angeles Office Market Report

Expansion in key sectors drives off ice recovery. Vacancy pressures are expected to ease further this year, supported by moderating corporate consolidation and a stable regional economy. Fewer leases over 50,000 square feet are set to expire in 2025 than last year, suggesting large-scale downsizing will be less prevalent. Downtown Los Angeles is poised to benefit from steadily growing public sector and legal tenants, following its strongest Class A net absorption since before the pandemic last year. Expanding health care and logistics firms should also sustain demand for medical office space and floorplans near industrial hubs, helping stabilize local vacancies in areas like the San Fernando Valley and South Bay during 2025. By contrast, West Los Angeles and Mid-Wilshire may continue to lag, as creative and tech firms scale back hiring and fully embrace flexible work models. However, the increase in California’s Film & Television Tax Credit Program from $330 million to $750 million annually is expected to support growth of the local entertainment industry, potentially aiding future demand in these areas.