Spencer ODonnell

The Los Angeles Basin office market is comprised of 314.9 million square feet of multi-tenant office space in buildings 25,000 square feet or larger. It ranks as the third largest office market in the nation, following New York City and the Greater Washington D.C. area. Most of its space, 55%, was built in or after 1985, making it a relatively young market. It is also relatively decentralized, with only 11% of the space located within Downtown Los Angeles and 89% dispersed throughout the region. Low-rise buildings make up 40% of the space, followed by 31% in mid-rise buildings and 29% in high-rise structures.

Despite the recent market-wide shutdown due to the COVID-19 pandemic, the Los Angeles Basin office market recorded positive market activity in the first quarter as vacancy decreased to 13.7%. In the coming months, it is expected leasing and sale activity will change rapidly. Los Angeles Basin office demand has been led by technology, entertainment and professional services companies. As shelter-in-place orders continue, the impact on economic market conditions will unfold. The Los Angeles County office market recorded 791,400 square feet of net absorption. Construction deliveries of just 271,000 square feet led to a falling vacancy rate of 14.0%. West Los Angeles accounted for nearly all of total demand for the quarter. Leasing activity, which increased approximately 1.1 million square feet from last quarter, recorded 4.4 million square feet.

The Los Angeles County office market recorded 316,200 square feet of net absorption. Construction deliveries of 823,300 square feet led to a rising vacancy rate of 14.6%. West Los Angeles accounted for 65% of the total demand for the quarter. Leasing activity, which dropped approximately 500,000 square feet from last quarter, recorded 3.3 million square feet. Receding activity from coworking firms and less activity overall led to this slide.