Los Angeles Office Market Report

Class B/C fundamentals on par with near-term average. Local vacancy surpassed the 20 percent threshold for the first time on record in March; however, several segments of Los Angeles’ office market are showing resilience. Class B/C vacancy was unchanged at 14.5 percent over the year ending in the first quarter, with tenants absorbing a net of 400,000 square feet of space. Demand has been fairly consistent for lower-cost options, keeping segment vacancy in the high-13 to mid-14 percent band since late 2020. Class A vacancy, meanwhile, rose 200 basis points over the past year to 26.6 percent as companies continue to reduce their upper-tier footprints. Fortunately, two-thirds of the Class A space slated for 2024 delivery was accounted for in May; although, some tenants may vacate other spaces when moving into these buildings.