Los Angeles Market Update: Tipping Point for Vacancy

As of May, office vacancy in Los Angeles reached a tipping point, dropping 40 basis points month-over-month, to 13.6 percent. While remaining below the 15.6 national average, vacancy is up by 1.9 percent year-over-year, CommercialEdge data shows, as the effects of the pandemic are still felt almost two years later.

Los Angeles’ office vacancy stands above Manhattan’s 10.4 percent—currently the lowest among gateway cities—and below Chicago’s 16.8 percent, while being relatively on par with San Francisco, at 13.9 percent.

In Orange County, office vacancies have remained at similar levels, reaching 12.7 percent in May overall. Similarly, Class B assets are preferred, having reached 10.8 percent, while Class A properties recorded a vacancy of 14.8 percent.

The Wilshire Corridor submarket saw some leasing activity, while vacancies reached 10.7 percent. Meanwhile, the metro’s CBD, where the redevelopment boom carries on, registered vacancy at 14.7 percent in May, among the highest in Los Angeles, mirroring the trend in other gateway cities of moving closer to the suburbs.

Office vacancy in some entertainment-focused markets such as West Hollywood or Burbank fared better, reaching 7.6 percent and 6.3 percent respectively. However, as many new creative office projects are under construction across the metro, it is yet uncertain how the trend will continue. At the other end of the spectrum, vacancies in Hollywood reached 15.5 percent this May.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here. We included properties of 25,000+ square feet in our research.