Los Angeles Office Market
Total vacancy, which has hovered around the 24-25% range since 2024, settled at 25.1%. Owner-user sales and conversions are tempering the average. Sublet availability dropped by 681,266 SF during the first quarter, resulting in the lowest amount of space in the market since 2020. Traditional industries such as law and finance now account for most leasing activity. Overall leasing volume is gradually improving as select expansions and new‑to‑market entrants help offset the broader trend of tenants right‑sizing. Lease term lengths are increasing amid flat office utilization, suggesting most companies have a grasp on their long-term space needs. Attractive concession packages are a factor, too. Trophy product continues to outperform, with a 13.4% vacancy.
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Los Angeles Industrial Market
First-quarter leasing volume recovered from a slump in the preceding quarter. Class A commitments accounted for nearly 20% of this activity – a flight-to-quality trend that has persisted throughout the current cycle. The market recorded 297,727 SF of net absorption this quarter, driven by big-box move-ins from Newmark-brokered transactions. Vacancy held flat at 4.2%. Infill contract rents for facilities with 24’+ clear heights have fallen 26.0% from their last peak — a moderate correction given the 103.0% growth recorded from early 2021 through early 2023. Concessions remain elevated. Lease term lengths are now tracking above their historical average as tenants lock in favorable conditions.
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