Los Angeles Office Market Report

The following reflects Los Angeles office market conditions as of Q3 2026.

MARKET DRIVERS

The Los Angeles office market continues to navigate headwinds from both ongoing structural shifts and near-term economic pressures. Businesses relocating outside of California, the lingering effects of hybrid and remote work, and an oversupply of Class B space remain among the market’s primary challenges. Direct vacancy edged down slightly from 16.5% in the second quarter to 16.4% in the third quarter, though broader market fundamentals remain soft. Century City has solidified its position as Los Angeles’s most desirable office submarket, a distinction earned through its prime location, extensive amenities, high-quality Class A inventory, and steady demand from major corporate tenants. In the quarter’s largest sale, Fortress Investment Group acquired the three-building, 198,126-square-foot former Sony Pictures Animation campus in Culver City at auction for $71.3 million; the prior tenant has since relocated to the Wilshire Courtyard in Mid-Wilshire.

ECONOMIC REVIEW

Los Angeles supports a broad and diverse economy spanning multiple industries, anchored by a creative, entrepreneurial workforce that continues to fuel business growth. Recent policy adjustments have helped bring more production and post-production work back to the region’s entertainment sector, but a weakening labor market, tariffs, and rising living costs are placing increasing strain on affordability throughout the region.

NEAR-TERM OUTLOOK

Overall, the Los Angeles office market continues to perform below the national average, even as select submarkets post substantial growth driven by demand from stable industries and a tenant preference for high-quality Class A space. Class A asking rents held steady quarter-over-quarter at an average of $3.79 per square foot on a full-service basis, as tenants continue to seek out premium Class A properties. In contrast, Downtown Los Angeles and other submarkets with a high concentration of Class B inventory continue to face challenges, as tenants downsize, reduce their office footprints, or relocate to higher-quality buildings.

Frequently Asked Questions

What is the office vacancy rate in Los Angeles in Q3 2026?

The direct office vacancy rate in Los Angeles was 16.4% in the third quarter of 2026, according to Kidder Mathews research. That’s down slightly from 16.5% in the second quarter of 2026, though up from 15.9% a year earlier in the third quarter of 2025. Total vacancy, which includes sublease space, stood at 17.7% (Data source: CoStar).

What is the total availability rate for Los Angeles office space in Q3 2026?

The total availability rate for Los Angeles office space was 19.3% in Q3 2026, according to Kidder Mathews research. That’s down slightly from 19.2% in the second quarter and down from 20.0% a year earlier. Availability includes all space being actively marketed, whether occupied, vacant, or under construction (Data source: CoStar).

How much office leasing activity occurred in Los Angeles in Q3 2026?

Total office leasing activity in Los Angeles reached 3,210,365 square feet in Q3 2026, according to Kidder Mathews research. That marks a 37.18% decline compared to the third quarter of 2025 and brings year-to-date leasing activity to 12,189,308 square feet, down from 19,402,908 square feet during the same period last year (Data source: CoStar).

What is net absorption in the Los Angeles office market, and what was it in Q3 2026?

Net absorption measures the change in occupied office space compared to the prior period — positive net absorption means tenants occupied more space than they vacated, while negative net absorption means the opposite. Los Angeles posted positive direct net absorption of 235,290 square feet in Q3 2026, according to Kidder Mathews research, even as year-to-date net absorption remained negative at -1,327,091 square feet. West Los Angeles and Downtown Los Angeles saw some of the largest submarket swings this quarter (Data source: CoStar).

What are average office asking rents in Los Angeles in Q3 2026?

The average direct asking lease rate across the Los Angeles office market was $3.50 per square foot per month on a full-service basis in Q3 2026, unchanged from the prior quarter, according to Kidder Mathews research. Class A space commanded a premium at $3.79 PSF, while submarket rates ranged from roughly $2.28 PSF in LAX to more than $5.09 PSF in West Los Angeles (Data source: CoStar).

How much office space is under construction in Los Angeles in Q3 2026?

Approximately 2.31 million square feet of office space was under construction in Los Angeles as of Q3 2026, according to Kidder Mathews research, with no new deliveries completed during the quarter. Major projects underway include the 825,000-square-foot Century City Center in West Los Angeles and the 606,740-square-foot Echelon Studios project in Mid-Wilshire, both slated for delivery in October 2026 (Data source: CoStar).

What was the largest office sale in Los Angeles in Q3 2026?

The largest office sale of Q3 2026 was the auction sale of the Sony Pictures Animation campus in West Los Angeles, a three-building, 198,126-square-foot complex acquired by Fortress Investment Group for $71.3 million, or $359.87 per square foot, according to Kidder Mathews research. The previous tenant relocated to the Wilshire Courtyard in Mid-Wilshire (Data source: CoStar).

What was the largest office lease signed in Los Angeles in Q3 2026?

The largest office lease signed in Q3 2026 was a 206,300-square-foot deal at the Mattel Design Facility in the South Bay submarket, signed in August 2026 with Goldstein Planting Investments as landlord, according to Kidder Mathews research. Innocean also signed a notable 101,000-square-foot lease at 888 North Douglas, also in South Bay (Data source: CoStar).

What is the outlook for the Los Angeles office market?

The Los Angeles office market is expected to continue underperforming the national average in the near term, according to Kidder Mathews research, even as high-quality Class A space in submarkets like Century City continues to see strong demand. Class B inventory, particularly in Downtown Los Angeles, is likely to remain under pressure as tenants downsize or relocate to newer buildings, while a softening labor market, tariffs, and rising costs continue to weigh on the broader market (Data source: CoStar).

Last updated: Q3 2026. Data source: CoStar, EDD. Compiled by the Kidder Mathews Research Group.

Q3 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.

Direct Vacancy Rate: Direct vacancy was 16.4% in Q3 2026, down slightly from 16.5% in Q2 2026 but up from 15.9% a year earlier.
Leasing Activity: Total leasing activity reached 3,210,365 SF in Q3 2026, a 37.18% decrease year-over-year, bringing year-to-date leasing activity to 12,189,308 SF.
Net Absorption: Direct net absorption turned positive at 235,290 SF in Q3 2026, though year-to-date absorption remains negative at -1,327,091 SF.
Asking Rents: The market-wide average direct asking rent held steady at $3.50 PSF/month (full-service), with Class A rents averaging $3.79 PSF.
Construction Pipeline: 2.31 million SF was under construction with no new deliveries in Q3 2026; leading projects include Century City Center (825,000 SF) and Echelon Studios (606,740 SF).
Largest Sale: Fortress Investment Group acquired the 198,126 SF Sony Pictures Animation campus in West Los Angeles for $71.3 million, or $359.87/SF.

Submarket Statistics

Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate

Los Angeles Office Submarket Statistics 3Q26 — Tri-Cities: includes Burbank, Glendale, Pasadena
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Burbank	13,947,987	20.8%	23.4%	27.4%	62,796	95,696	444,672	$4.27
Glendale	11,815,900	17.6%	18.7%	20.3%	-67,359	184,474	534,670	$3.21
Pasadena	16,865,845	13.4%	14.4%	17.4%	13,262	241,235	726,253	$3.51
Tri-Cities	42,629,732	17.0%	18.6%	21.5%	8,699	521,405	1,705,595	$3.81

Los Angeles Office Submarket Statistics 3Q26 — Downtown Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Downtown Los Angeles	68,093,498	23.3%	24.4%	23.3%	398,252	196,177	1,587,023	$3.01

Los Angeles Office Submarket Statistics 3Q26 — Mid-Cities
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Mid-Cities	8,489,579	7.2%	7.3%	9.3%	-91,433	61,237	150,141	$2.89

Los Angeles Office Submarket Statistics 3Q26 — 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	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
East Hollywood/Silver Lake	4,364,378	6.9%	7.3%	20.9%	10,905	6,264	41,407	$4.20
Hollywood	8,619,168	23.1%	24.5%	26.4%	-68,311	87,655	391,602	$3.97
Mid-Wilshire	15,204,523	18.5%	18.7%	15.7%	-38,929	28,900	204,714	$2.77
Miracle Mile	5,975,695	31.1%	32.0%	33.9%	-108,272	85,548	131,173	$4.02
Park Mile	1,654,116	27.4%	28.0%	18.8%	2,139	0	23,289	$3.08
West Hollywood	7,670,835	11.1%	12.6%	14.1%	-12,330	78,537	303,685	$4.25
Mid-Wilshire (Region Total)	43,488,715	19.0%	19.8%	20.7%	-214,798	286,904	1,095,870	$3.35

Los Angeles Office Submarket Statistics 3Q26 — 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	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Calabasas/Westlake Village	6,882,943	16.8%	18.4%	20.5%	3,727	56,470	243,867	$2.75
Eastern SFV	5,459,671	5.9%	6.1%	7.2%	-10,318	37,539	98,226	$2.46
Encino	4,909,990	12.6%	13.1%	14.4%	9,278	55,681	252,711	$2.71
North Hollywood	2,449,620	14.4%	19.7%	21.8%	6,877	23,195	43,737	$3.27
Sherman Oaks	3,408,602	13.1%	13.9%	14.8%	20,373	48,420	151,051	$2.68
Studio/Universal Cities	3,842,441	11.3%	11.3%	13.4%	28,400	28,104	67,841	$3.10
Tarzana	1,727,341	9.0%	9.2%	9.6%	12,731	9,276	56,338	$2.95
Western SFV	8,136,014	7.6%	8.5%	10.8%	12,262	38,120	198,186	$2.70
Woodland Hills/Warner City	9,366,978	17.4%	22.6%	25.0%	49,652	86,013	285,524	$2.47
San Fernando Valley	46,183,600	12.4%	14.3%	16.1%	132,982	382,818	1,397,481	$2.74

Los Angeles Office Submarket Statistics 3Q26 — San Gabriel Valley
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
San Gabriel Valley	29,556,183	7.0%	7.1%	7.6%	-22,288	135,941	542,522	$2.85

Los Angeles Office Submarket Statistics 3Q26 — 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	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
190th Street Corridor	3,329,227	13.2%	13.5%	12.2%	-22,093	19,826	80,158	$3.21
Beach Cities/Palos Verdes	4,481,206	10.4%	10.4%	7.3%	-13,128	5,154	162,670	$3.28
El Segundo	18,173,976	14.9%	15.5%	19.5%	50,294	447,992	1,008,046	$4.05
Hawthorne/Gardena	1,938,774	7.1%	7.1%	7.3%	-6,335	10,250	29,370	$2.33
LAX	4,564,541	28.1%	28.1%	25.9%	-37,625	24,027	106,980	$2.28
Downtown Long Beach	7,737,633	17.3%	20.7%	22.4%	54,865	21,981	111,816	$2.79
Suburban Long Beach	8,734,980	10.9%	11.2%	13.5%	76,280	49,806	277,865	$2.95
Torrance	7,299,302	8.3%	10.5%	11.6%	67,200	60,342	249,034	$3.12
South Bay	56,259,639	14.1%	15.1%	16.6%	169,458	639,378	2,025,939	$3.05

Los Angeles Office Submarket Statistics 3Q26 — Southeast Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Southeast Los Angeles	7,878,994	5.9%	6.0%	6.3%	-37,931	43,019	117,401	$2.75

Los Angeles Office Submarket Statistics 3Q26 — West Los Angeles
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
West Los Angeles	74,418,451	18.3%	20.5%	24.5%	-107,651	943,486	3,567,336	$5.09

Los Angeles Office Market Total 3Q26 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Total	376,998,391	16.4%	17.7%	19.3%	235,290	3,210,365	12,189,308	$3.50

Los Angeles Office 3Q26 — Breakdown by building class
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Direct Rental Rate
Class A	150,595,799	20.8%	22.9%	25.1%	55,451	1,315,033	4,972,655	$3.79
Class B	176,405,335	15.3%	16.2%	17.6%	85,571	1,671,195	6,402,622	$3.30
Class C	49,846,934	7.1%	7.3%	7.7%	94,268	224,137	814,031	$3.13

Significant Sale Transactions 3Q26

Los Angeles Office Significant Sale Transactions 3Q26
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
Sony Pictures Animation Campus (Auction)	West Los Angeles	198,126	$71,300,000	$359.87	Fortress Investment Group	Hackman Capital Ptnrs.
LA World Trade Ctr. (Sold for Land Value)	Downtown Los Angeles	160,301	$53,200,000	$331.88	Jamison Properties	350 South Figueroa, LLC
132 S Rodeo Dr	West Los Angeles	29,860	$51,500,000	$1,724.72	Investcorp	132 Rodeo LP
Ocean Park Plaza (High Vacancy Property)	West Los Angeles	100,700	$50,600,000	$502.48	Wildwood School	Jade Enterprises
Lee Hughes Med Bldg (Purchase By Tenant)	Tri-Cities	76,197	$39,050,000	$512.49	Adventist Health	Welltower, Inc.
Oceangate Tower	South Bay	226,748	$36,000,000	$158.77	Port Of Long Beach	Faring
Topaz Tower	South Bay	309,732	$26,100,000	$84.27	Pacific Plaza Premier Dev.	Dof II-Topaz, LLC

Significant Lease Transactions 3Q26

Los Angeles Office Significant Lease Transactions 3Q26
Property	Submarket	SF	Transaction Date	Landlord	Tenant
Mattel Design Facility	South Bay	206,300	August 2026	Goldstein Planting Investments	Undisclosed
888 North Douglas	South Bay	101,000	August 2026	Hackman Capital Partners	Innocean
Royal Laundry Campus	Tri-Cities	81,273	July 2026	Charing Cross Partners LP	Undisclosed
Taft Building	Mid-Wilshire	71,992	August 2026	Elat Properties, Inc	Undisclosed
2121 Avenue of the Stars	West Los Angeles	67,860	July 2026	The Irvine Company	PwC
3401 Exposition Blvd	West Los Angeles	59,776	July 2026	XYZ Rent	Company 3
Studio Plaza	Tri-Cities	53,668	July 2026	Douglas Emmett, Inc.	Funko

Significant Under Construction

Los Angeles Office Significant Under Construction 3Q26
Property	Address	Submarket	SF	Owner	Delivery
Century City Center	1950 Avenue of the Stars	West Los Angeles	825,000	JMB Financial Advisors LLC	October 2026
Echelon Studios	5601 Santa Monica Blvd	Mid-Wilshire	606,740	BARDAS Investment Group	October 2026
Apple LA Campus	8825 National Blvd	West Los Angeles	536,000	Apple Inc.	June 2027
Echelon \| The Workshop	1200 N Cahuenga Blvd	Mid-Wilshire	101,300	BARDAS Investment Group	October 2026
1475 E El Segundo Blvd	1475 E El Segundo Blvd	South Bay	63,915	Smoky Hollow Industries LLC	November 2026
1011 N Sycamore Ave	1011 N Sycamore Ave	Mid-Wilshire	45,000	CIM Group	October 2026
Skechers	305 S Sepulveda Blvd	South Bay	37,879	Skechers	October 2026

Data as of 3Q26. Source: CoStar, EDD. Prepared by the Kidder Mathews Research Group.

Contact

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