The Los Angeles retail market in 2Q 2026 remained fundamentally stable, with vacancy holding in the mid-5% range and strong quarterly net absorption signaling continued tenant demand. While asking rents and sales prices softened slightly year-over-year, new construction activity and deliveries continued to decline, reflecting a more measured development pipeline. Explore our full Los Angeles retail market review for detailed insights on leasing activity, investment trends, and market performance.
Frequently Asked Questions
What is the retail vacancy rate in Los Angeles in Q2 2026?
The Los Angeles retail vacancy rate was 5.6% in Q2 2026, according to Kidder Mathews research. That is up 10 basis points from 5.5% in Q2 2025, but essentially flat compared to 5.7% the prior quarter, indicating a stable occupancy environment (Data source: CoStar).
What are average retail asking rents in Los Angeles in Q2 2026?
Average retail asking rents in Los Angeles were $2.76 per square foot per month in Q2 2026, according to Kidder Mathews research. That is down 3.86% from $2.87 PSF one year earlier and essentially unchanged from $2.77 PSF the prior quarter (Data source: CoStar).
What was net absorption for the Los Angeles retail market in Q2 2026?
Net absorption totaled a positive 409,700 square feet in Q2 2026, according to Kidder Mathews research. Net absorption measures the change in occupied retail space over the quarter, and the positive figure indicates tenants leased and moved into more space than they vacated, helping offset prior occupancy losses; year-to-date net absorption stood at -30,511 SF, an improvement from -727,733 SF over the same period in 2025 (Data source: CoStar).
How much retail space is under construction in Los Angeles right now?
There was 524,688 square feet of retail space under construction in Los Angeles as of Q2 2026, according to Kidder Mathews research. That is down 36.37% from 824,594 SF underway a year earlier, reflecting a more measured development pipeline (Data source: CoStar).
How much new retail space was delivered in Los Angeles in 2026?
Los Angeles retail construction deliveries totaled 82,506 square feet in Q2 2026, with year-to-date deliveries of 228,764 SF, according to Kidder Mathews research. That is down 10.50% from the 255,611 SF delivered over the same period in 2025 (Data source: CoStar).
What are retail investment sale prices and cap rates in Los Angeles in Q2 2026?
The average retail sale price in Los Angeles was $354 per square foot in Q2 2026, down 3.58% from $367 PSF a year earlier, according to Kidder Mathews research. The average cap rate rose to 6.2%, up 20 basis points from 6.0% in Q2 2025 (Data source: CoStar).
What was the largest retail sale transaction in Los Angeles in Q2 2026?
The largest retail sale transaction was FIGat7th in Downtown Los Angeles, a 330,784-square-foot property that sold for $68,500,000, or $207.08 per square foot, according to Kidder Mathews research. JH Real Estate Partners, Inc. purchased the asset from Brookfield Properties (Data source: CoStar).
What was the largest retail lease transaction in Los Angeles in Q2 2026?
The largest retail lease transaction was Nordstrom Rack’s 30,000-square-foot lease at Marina Marketplace in the Marina Del Rey/Venice submarket, signed in June 2026, according to Kidder Mathews research (Data source: CoStar).
What retail projects are currently under construction in Los Angeles?
Notable retail projects under construction in Los Angeles include West Harbor in Beach Cities/Palos Verdes at 208,020 SF delivering in Q3 2026, The Walk in Southeast Los Angeles at 110,000 SF delivering in Q3 2027, and Rowland Town Center in the Eastern San Gabriel Valley at 82,390 SF delivering in Q3 2026, according to Kidder Mathews research (Data source: CoStar).
What is the outlook for the Los Angeles retail market?
The Los Angeles retail market is expected to remain stable, with vacancy holding in the mid-5% range and steady tenant demand supporting positive quarterly absorption, according to Kidder Mathews research. A shrinking construction pipeline and slower deliveries point to continued limited new supply, even as asking rents and sale prices have softened modestly year-over-year (Data source: CoStar).
Last updated: Q2 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.
2Q 2026 Los Angeles Retail Market: Key Data Points
Explore our full Los Angeles retail market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy Remains Stable: Los Angeles retail vacancy reached 5.6% in 2Q 2026, up just 10 basis points from 5.5% one year ago.
- Strong Quarterly Absorption: Net absorption totaled 409,700 SF during 2Q 2026, helping offset prior occupancy losses and reflecting continued tenant demand across the market.
- Asking Rents Decline Modestly: Average asking rents measured $2.76 PSF per month, down 3.9% year-over-year from $2.87 PSF.
- Development Pipeline Contracts: Retail space under construction fell to 524,688 SF, a 36.4% decrease from the 824,594 SF underway one year earlier.
- Construction Deliveries Slow: YTD construction deliveries totaled 228,764 SF, down 10.5% from the same period in 2025.
- Investment Market Adjusts: Average retail sale prices declined to $354 PSF, down 3.6% year-over-year, while average cap rates increased to 6.2%.
Market Breakdown — Quarterly Comparison
| Metric | 2Q26 | 1Q26 | 2Q25 | YOY Change |
|---|---|---|---|---|
| Vacancy Rate | 5.6% | 5.7% | 5.5% | 10 bps |
| Average Asking Rents/SF/Mo | $2.76 | $2.77 | $2.87 | -3.86% |
| Under Construction (SF) | 524,688 | 595,194 | 824,594 | -36.37% |
| Average Sales Price/SF | $354 | $468 | $367 | -3.58% |
| Average Cap Rate | 6.2% | 5.7% | 6.0% | 20 bps |
Market Breakdown — Year-to-Date
| Metric | 2Q26 | YTD 2026 | YTD 2025 | YOY Change |
|---|---|---|---|---|
| Construction Deliveries (SF) | 82,506 | 228,764 | 255,611 | -10.50% |
| Net Absorption (SF) | 409,700 | -30,511 | -727,733 | N/A |
Significant Sale Transactions 2Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| FIGat7th | Downtown Los Angeles | 330,784 | $68,500,000 | $207.08 | JH Real Estate Partners, Inc. | Brookfield Properties |
| 400 Foothill Rd | Beverly Hills | 121,784 | $49,000,000 | $402.35 | Fletcher Jones Automotive Group | Group 1 Automotive |
| Continental Park | El Segundo | 105,000 | $42,000,000 | $400.00 | Bay Club South Bay Land, LLC | Continental Development Corp. |
Significant Lease Transactions 2Q 2026
| Property | Submarket | SF | Transaction Date | Tenant |
|---|---|---|---|---|
| Marina Marketplace | Marina Del Rey/Venice | 30,000 | June 2026 | Nordstrom Rack |
| 1404 3rd St | Santa Monica | 28,275 | May 2026 | TurboTax Experts |
| 4040 Eagle Rock Blvd | Glendale | 23,564 | May 2026 | Island Pacific Supermarket |
Significant Under Construction
| Property | Submarket | SF | Delivery |
|---|---|---|---|
| West Harbor | Beach Cities/Palos Verdes | 208,020 | 3Q 2026 |
| The Walk | Southeast Los Angeles | 110,000 | 3Q 2027 |
| Rowland Town Center | Eastern SGV | 82,390 | 3Q 2026 |
Data as of 2Q 2026. Source: CoStar. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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