Office Development Slows Down in Los Angeles

Los Angeles’ office pipeline diminished after some massive projects came online last year, with the figure now returning closer to pre-pandemic levels. As of February, 4.3 million square feet of office space was under construction, CommercialEdge data shows. The total represented 1.5 percent of total stock, 70 basis points below the national rate. In line with national trends, new space under construction went down in Los Angeles as well.

Together with planned and prospective properties, the development pipeline accounted for 3.6 percent of total stock, pointing to continued healthy levels of activity going forward. Two office properties were completed in February, totaling more than 790,000 square feet. No new developments of 50,000 square feet or more broke ground in Los Angeles since the start of the year.

Of the 32 office developments currently underway across the metro, only 11 were rated Class B, while 20 are Class A projects, highlighting the increased demand for high-quality space. Creative office and mixed-use projects continue to be a focus for developers.

Flight to quality takes effect in West L.A.

In West Los Angeles, Hudson Pacific Properties and Macerich completed the One Westside mall-to-office conversion, a project several years in the making and estimated to cost $475 million. The Gensler-designed creative office complex totals 584,000 square feet and will be anchored by Google.

Two other projects are currently underway in the West Los Angeles submarket, totaling over 860,000 square feet of office space. Both projects broke ground in 2020 and aim to attract tenants with their amenity-rich design and focus on wellness. A joint venture of Northwood Investors and McCarthy Cook is constructing Lumen West L.A.—planned to offer 570,000 square feet of office, along with retail and private outdoor space. On the same street—West Olympic Boulevard—Hines Interests is developing West Edge, in partnership with USAA Real Estate and Philena Properties. The mixed-use development will feature over 160,000 square feet of creative office and 600 luxury apartments, along with retail and landscaped outdoor areas.

Los Angeles’ CBD had the most amount of space underway, over 1.1 million square feet across several large projects. Other submarkets with high levels of activity included Burbank (800,000 square feet under construction), Pasadena (469,000 square feet) and North Hollywood (415,000).

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.