Los Angeles Office Market Report

The following reflects Los Angeles office market conditions as of 2Q 2026.

MARKET DRIVERS

The Los Angeles office market continued to face challenging conditions in the second quarter, even as pockets of strength emerged. The direct vacancy rate rose to 16.4%, up from 16.0% in the first quarter. West Los Angeles and South Bay continued to outperform, supported by tenant preference for high-quality Class A space and steady demand from the legal, media, aerospace, and defense sectors, along with ongoing healthcare requirements. Office-to-multifamily conversions kept shrinking overall inventory and the construction pipeline, with most active development limited to build-to-suit projects and well-located Class A properties still well below historical activity levels. Limited new supply is no longer a major source of market pressure given the abundance of direct and sublease availability. While demand across Los Angeles remains soft, early signs of stabilization are appearing alongside continued owner-user acquisitions, including The Capital Group’s purchase of 333 S Hope St, LADWP’s purchase of 865 S Figueroa St, and State Compensation Insurance Fund’s purchase of 35 North Lake Ave.

ECONOMIC REVIEW

Demand for office space remained modest but showed a slight upward trend during the quarter. Constrained new supply is no longer a primary driver of market tension, as hybrid work arrangements continue to reduce overall space requirements. Developers are scaling back new building activity to focus on well-located, build-to-suit projects, while older office parks are increasingly being redeveloped into apartments and senior housing. Broader economic growth has been constrained by a shortage of available labor, a challenging job market, and insufficient productivity gains. Key office-using sectors, particularly technology and entertainment, remain cautious amid rising company costs, regulatory pressures, job cuts, and continued outmigration.

NEAR-TERM OUTLOOK

Rent growth is expected to stay moderate overall, though western submarkets show more promising long-term patterns. Landlords continue to offer more generous concession packages, tenant improvement allowances, and competitive market rents to attract tenants. Class A asking rents held relatively steady during the quarter, averaging $3.75 per square foot on a full-service basis.

Frequently Asked Questions

What is the Los Angeles office vacancy rate in Q2 2026?

The direct office vacancy rate in Los Angeles reached 16.4% in Q2 2026, up from 16.0% in the prior quarter and 15.8% a year earlier, according to Kidder Mathews research. Total vacancy, which includes sublease space, stood at 17.8% market-wide. Vacancy varied widely by submarket, from 5.6% in Southeast Los Angeles to 28.6% in Miracle Mile.

What is the total office availability rate in Los Angeles?

Total availability across the Los Angeles office market was 19.4% in Q2 2026, down slightly from 19.5% in the prior quarter and 19.8% one year ago (Data source: CoStar). Availability includes space actively marketed for lease, whether currently occupied or vacant.

What are average office asking rents in Los Angeles?

Average direct asking rents held at $3.50 per square foot per month on a full-service basis in Q2 2026, unchanged from both the prior quarter and a year earlier, according to Kidder Mathews research. Class A asking rents averaged $3.75 PSF. Submarket rents ranged from $2.29 PSF in LAX to $5.05 PSF in West Los Angeles.

How much office leasing activity occurred in Los Angeles in Q2 2026?

Total leasing activity reached 3,389,791 SF in Q2 2026, according to Kidder Mathews research. Year-to-date leasing volume totaled roughly 8.2M SF, down 56.8% from 18,974,443 SF over the same period in 2025, reflecting continued caution among office occupiers.

What is net absorption for Los Angeles office space, and what does it mean?

Direct net absorption was negative 1,539,344 SF in Q2 2026, according to Kidder Mathews research, meaning tenants vacated or gave back more space than they leased during the quarter. Year-to-date direct net absorption totaled negative 1.5M SF, an improvement from negative 2,619,172 SF over the same period in 2025.

How much office space is under construction in Los Angeles?

Approximately 2.31M SF of office space was under construction across Los Angeles as of Q2 2026, according to Kidder Mathews research. Development remains concentrated in build-to-suit and premier Class A projects, including Century City Center and the Apple LA Campus, both in West Los Angeles.

What was the largest Los Angeles office sale in Q2 2026?

The largest sale was Douglas Emmett Inc.’s acquisition of the Bedford Collection in West Los Angeles for $260,000,000, or $1,085.25 per square foot, from CPP Investments, according to Kidder Mathews research.

What was the largest Los Angeles office lease signed in Q2 2026?

The largest lease was signed at Media Studios Phase IV in the Burbank/Glendale/Pasadena submarket, where an undisclosed tenant leased 78,064 SF from Blackstone Inc. in April 2026, according to Kidder Mathews research.

Which Los Angeles office submarkets have the highest and lowest vacancy rates?

Southeast Los Angeles and Mid-Cities posted among the lowest direct vacancy rates at 5.6% and 6.2%, respectively, according to Kidder Mathews research, while Miracle Mile and Park Mile posted the highest at 28.6% and 27.5%.

What is the outlook for the Los Angeles office market in 2026?

The outlook calls for continued moderate rent growth overall, with western submarkets showing the most promising long-term trends, according to Kidder Mathews research. Landlords are expected to keep offering generous concessions and tenant improvement allowances as demand gradually stabilizes.

Last updated: 2Q 2026. Data source: Kidder Mathews Research, CoStar, EDD. Compiled by the Kidder Mathews Research Group.

2Q 2026 Los Angeles Office Market: Key Data Points

Explore our full Los Angeles office market review for deeper insights into leasing trends, sale activity, and submarket performance.

Vacancy Rate Remains Elevated: Los Angeles’ direct office vacancy rate reached 16.4% in Q2 2026, up slightly from 15.8% one year ago, reflecting continued challenges in tenant demand.
Asking Rents Hold Steady: Average direct asking rents remained stable at $3.50 PSF per month, demonstrating resilience despite higher vacancy and ongoing leasing competition.
Construction Pipeline Remains Limited: Just 2.31M SF is under construction across the market, with development activity largely concentrated in build-to-suit and premier Class A projects.
Leasing Activity Slows Year-Over-Year: Total office leasing volume reached 8.2M SF year-to-date, down 56.8% from the same period last year as occupiers remain cautious in their space decisions.
Negative Absorption Persists: Direct net absorption totaled negative 1.5M SF year-to-date, highlighting the continued impact of hybrid work and corporate space optimization strategies.
Office Conversions Continue to Reduce Supply: Office-to-multifamily redevelopment and adaptive reuse projects are removing older office inventory from the market, helping limit future supply growth.

Submarket Statistics

Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate

Los Angeles Office Submarket Statistics 2Q 2026 — Tri-Cities: includes Burbank, Glendale, Pasadena
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Burbank	13,915,465	21.3%	24.0%	26.7%	-28,221	197,357	352,247	$4.27
Glendale	11,854,851	17.2%	18.1%	21.0%	92,897	174,236	340,050	$3.21
Pasadena	16,756,597	13.8%	15.0%	17.3%	-6,572	166,798	417,937	$3.57
Tri-Cities	42,526,913	17.2%	18.8%	21.4%	58,104	538,391	1,110,234	$3.80

Los Angeles Office Submarket Statistics 2Q 2026 — Downtown Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Downtown Los Angeles	68,563,430	23.7%	24.8%	23.1%	-726,198	544,993	1,316,131	$2.97

Los Angeles Office Submarket Statistics 2Q 2026 — Mid-Cities
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Mid-Cities	8,547,080	6.2%	6.2%	7.9%	-28,632	34,588	81,150	$2.92

Los Angeles Office Submarket Statistics 2Q 2026 — Mid-Wilshire: includes East Hollywood/Silver Lake, Hollywood, Mid-Wilshire, Miracle Mile, Park Mile, West Hollywood
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
East Hollywood/Silver Lake	4,369,619	7.4%	7.7%	21.0%	-121,150	4,293	27,643	$4.11
Hollywood	8,607,750	22.2%	23.2%	25.4%	15,050	103,116	284,903	$4.09
Mid-Wilshire	15,060,512	18.3%	18.5%	16.2%	-213,897	79,978	148,544	$2.78
Miracle Mile	6,036,891	28.6%	30.0%	32.8%	-155,458	12,961	44,104	$4.03
Park Mile	1,654,725	27.5%	28.1%	18.9%	-31,844	3,886	23,289	$3.08
West Hollywood	7,671,050	11.0%	12.8%	14.7%	-15,072	140,399	218,428	$4.82
Mid-Wilshire (Total)	43,400,547	18.5%	19.3%	20.6%	-522,371	344,633	746,911	$3.41

Los Angeles Office Submarket Statistics 2Q 2026 — San Fernando Valley: includes Calabasas/Westlake Village, Eastern SFV, Encino, North Hollywood, Sherman Oaks, Studio/Universal Cities, Tarzana, Western SFV, Woodland Hills/Warner City
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Calabasas/Westlake Village	6,907,120	17.2%	19.9%	22.2%	-32,027	106,189	181,481	$2.77
Eastern SFV	5,450,753	5.6%	5.9%	7.5%	-967	37,790	79,052	$2.48
Encino	4,906,533	12.8%	13.3%	15.1%	21,181	37,980	189,853	$2.71
North Hollywood	2,450,620	14.6%	19.9%	22.4%	13,042	3,034	19,692	$3.30
Sherman Oaks	3,399,202	13.6%	15.1%	15.8%	-31,427	62,959	101,395	$2.69
Studio/Universal Cities	3,845,003	12.0%	12.0%	13.5%	60,715	27,641	39,737	$3.22
Tarzana	1,727,341	9.6%	9.9%	10.1%	105,438	26,973	44,882	$2.86
Western SFV	8,146,419	7.5%	8.3%	11.0%	5,385	17,834	157,940	$2.69
Woodland Hills/Warner City	9,447,025	17.9%	23.0%	23.9%	9,958	64,857	191,299	$2.44
San Fernando Valley (Total)	46,280,016	12.7%	14.8%	16.5%	151,298	385,257	1,005,331	$2.75

Los Angeles Office Submarket Statistics 2Q 2026 — San Gabriel Valley
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
San Gabriel Valley	29,611,544	6.9%	7.0%	7.6%	-19,426	117,023	386,776	$2.80

Los Angeles Office Submarket Statistics 2Q 2026 — South Bay: includes 190th Street Corridor, Beach Cities/Palos Verdes, El Segundo, Hawthorne/Gardena, LAX, Downtown Long Beach, Suburban Long Beach, Torrance
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
190th Street Corridor	3,387,032	12.3%	12.6%	10.0%	-15,016	30,390	60,332	$2.94
Beach Cities/Palos Verdes	4,464,145	10.1%	10.1%	7.9%	62,731	6,878	156,516	$3.19
El Segundo	18,288,031	15.2%	16.9%	22.0%	-66,250	149,943	557,183	$4.20
Hawthorne/Gardena	2,000,965	6.8%	6.8%	7.0%	-54,431	8,811	19,734	$2.35
LAX	4,585,490	27.2%	27.2%	25.9%	-49,387	54,251	82,953	$2.29
Downtown Long Beach	7,721,521	18.1%	21.4%	23.4%	-41,496	25,042	42,074	$2.79
Suburban Long Beach	8,819,696	11.7%	12.0%	13.8%	-178,154	70,506	173,735	$2.96
Torrance	7,263,548	9.3%	11.6%	13.4%	4,390	54,282	167,793	$3.15
South Bay (Total)	56,530,428	14.4%	15.7%	17.8%	-337,613	400,103	1,260,320	$3.19

Los Angeles Office Submarket Statistics 2Q 2026 — Southeast Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Southeast Los Angeles	7,801,578	5.6%	5.7%	6.1%	44,622	49,524	69,034	$2.70

Los Angeles Office Submarket Statistics 2Q 2026 — West Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
West Los Angeles	74,547,747	18.2%	20.4%	24.6%	-159,128	975,279	2,230,061	$5.05

Los Angeles Office Market Total 2Q 2026 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Los Angeles Total	377,809,283	16.4%	17.8%	19.4%	-1,539,344	3,389,791	8,205,948	$3.50

Los Angeles Office 2Q 2026 — Breakdown by Class
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Class A	152,755,315	21.0%	23.3%	25.3%	-516,949	1,641,435	3,302,346	$3.75
Class B	175,514,616	15.2%	16.2%	17.8%	-860,163	1,477,515	4,362,976	$3.32
Class C	49,347,476	6.7%	6.9%	7.2%	-162,232	270,841	540,626	$3.13

Significant Sale Transactions 2Q 2026

Los Angeles Office Significant Sale Transactions 2Q 2026
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
Bedford Collection	West Los Angeles	239,577	$260,000,000	$1,085.25	Douglas Emmett Inc.	CPP Investments
Bank of America Plaza	Downtown Los Angeles	1,421,711	$210,000,000	$147.71	The Capital Group Co., Inc.	Trigild
Wells Fargo Center	Downtown Los Angeles	1,400,639	$150,000,000	$107.09	The 601W Companies	Brookfield Corp.
865 S Figueroa St	Downtown Los Angeles	718,993	$92,500,000	$128.65	Los Angeles Dept of Water & Power	Manulife US R.E.
35 N Lake Ave – NOLA 35	Burbank/Glendale/Pasadena	158,785	$33,175,000	$208.93	State Compensation Insurance Fund	Swift R.E. Ptns.
3424 Wilshire Blvd	Mid-Wilshire	237,427	$21,000,000	$88.45	Arc Capital Partners	Jamison Serv., Inc.
901 Corporate – LACC	San Gabriel Valley	100,743	$17,700,000	$175.69	Focus Universal Inc.	Jamison Serv., Inc.

Significant Lease Transactions 2Q 2026

Los Angeles Office Significant Lease Transactions 2Q 2026
Property	Submarket	SF	Transaction Date	Landlord	Tenant	Lease Type
Media Studios Phase IV	Burbank/Glendale/Pasadena	78,064	April 2026	Blackstone Inc.	Undisclosed	New Lease
WorkScapes at the Hayden Tract	West Los Angeles	76,892	April 2026	IDS Real Estate Group	Apple	Renewal
2255 N Ontario St	Burbank/Glendale/Pasadena	65,000	June 2026	Blackstone/Worthe RE	Sony Entertainment	Renewal
2255 N Ontario St	Burbank/Glendale/Pasadena	64,000	June 2026	Blackstone/Worthe RE	Insomniac Games	Renewal/Expanded
Playa Jefferson	West Los Angeles	57,178	April 2026	Rockwood Capital	Undisclosed	New Lease
South Tower	Downtown Los Angeles	54,216	May 2026	Brookfield Properties	Undisclosed	New Lease
2900 W Alameda Ave – The Pointe	Burbank/Glendale/Pasadena	30,600	June 2026	Blackstone/Worthe RE	Producer-Writer’s Guild of America	Renewal
425 W Broadway – Broadway Plaza	Burbank/Glendale/Pasadena	18,525	June 2026	Sharp Capital	Acrisure	Renewal

Significant Under Construction

Los Angeles Office Significant Under Construction 2Q 2026
Property	Submarket	SF	Delivery Date	Owner
Century City Center	West Los Angeles	825,000	June 2026	JMB Financial Advisors, LLC
Echelon Studios	Mid-Wilshire	606,740	October 2026	Bardas Investment Group
Apple LA Campus	West Los Angeles	536,000	June 2027	Apple Inc.
Echelon \| The Workshop	Mid-Wilshire	101,300	June 2026	BARDAS Investment Group
1475 E El Segundo Blvd	South Bay	63,915	August 2026	Smoky Hollow Industries, LLC
Eastham Station	West Los Angeles	57,432	October 2026	Redcar Properties Ltd.
Skechers	South Bay	37,879	July 2026	Skechers

Data as of 2Q 2026. Source: EDD, CoStar. Prepared by the Kidder Mathews Research Group.

Contact

GARY BARAGONA
Vice President, Research
gary.baragona@kidder.com
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