Los Angeles Office Market Report

1st Quarter 2022

Posted In — Market Research | Market Report


AS THE OMICRON VARIANT begins to wane, there is optimism for the LA Office market to rebound as companies signal a return to office in the  following months.

AFTER REPORTING POSITIVE GAINS in 4Q 2021, direct net absorption reported negative in 1Q 2022 with 536K SF. Anticipate direct net absorption to pick up in the following quarters as tenants who leased spaced in 4Q 2021 wait for tenant improvements to be completed.

SUBLEASE AVAILABILITIES have fallen after peaking over 9.7M SF in 1Q 2021, falling by 4.0% to 9.3M SF in 1Q 2022. Silicon Beach continues to thrive due to healthy demand fundamentals from the tech industry and the Downtown Los Angeles market is showing signs of life with tenants in search for smaller requirements.

DIRECT ASKING LEASE RATES increased in 1Q 2022, concluding at $3.52/SF on a full-service basis. Concessions have also increased, remaining above what they were pre-pandemic as landlords continue to provide more in order to achieve face rents.

USER SALES continue to be in high demand even with interest rates increasing as tenants apply their focus towards purchases with 45 transactions completed in 1Q 2022. The average sale price in 1Q 2022 was $375.55/SF with cap rates at 5.0%.


AS OF JANUARY 2022, the unemployment rate increased 20 basis points (bps) from the month prior to 7.0%.

COUNTRYWIDE JOB LEVELS decreased by 75,100 between December and January with retail trade down 12,700 jobs.


TECH AND ENTERTAINMENT industries will lead the way in Silicon Beach while Downtown Los Angeles is expected to improve as tours and proposals begin to trend up. Rent growth should remain limited and landlords will continue to offer concessions in order to maintain rental rates. As the Omicron variant begins to wane, many companies have signaled a return to office in April, and we can anticipate demand to increase moving forward as tenants begin to act on their real estate needs.

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