Los Angeles Office Market Report
Positive Absorption Signals Recovery Underway,
While Record Vacancy Suggests Hurdles Remain
Local tech hub backs leasing improvement. Los Angeles County entered the second half of this year with vacancy at an all-time high and 70 million square feet of office space unaccounted for. Still, a silver lining exists. The pace of vacancy increase slowed noticeably during the 12-month period ending in June, rising 30 basis points after swelling by 330 basis points during the prior yearlong span. A significant increase in lease executions over 25,000 square feet is to credit for this shift, as these commitments supported positive net absorption over the past four quarters. Approximately one-fourth of these agreements were inked in West Los Angeles, allowing vacancy in the metro's largest submarket by stock to decline 20 basis points. The extent to which office demand has recovered in Silicon Beach will be further tested in the near term, as the area is slated to add almost 1.7 million square feet of space during the second half.