- Los Angeles office performance varies sharply by submarket, making citywide vacancy and leasing averages less useful for asset-level decisions.
- Downtown LA vacancy reached 35.3% in Q2, compared with 23% in Century City, where several major tenants have relocated.
- West Los Angeles captured 38.4% of Q2 leasing activity, while owners are increasingly favoring smaller, longer-tenured tenants.
Bisnow reports in its coverage of LA office submarket performance that the Los Angeles office market is recovering too unevenly for broad citywide conclusions. Panelists at the Los Angeles Office and Workplace Summit described the market as a collection of distinct industry and talent nodes. Some national investors have avoided or exited LA office. Local operators said that reputation does not fit every submarket.
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Los Angeles Office Market Splits
Century City has emerged as one of the strongest pockets. Panelists described it as safe, well-amenitized, and attractive to tenants leaving other parts of Los Angeles. Downtown LA vacancy reached 35.3% in Q2, compared with 23% in Century City. West Los Angeles generated 38.4% of the city’s second-quarter leasing activity. Century City drove a meaningful share of that volume. Three of the top 10 leases were move-ins to the submarket. PwC’s 138K SF deal at 2121 Avenue of the Stars was the second-largest lease of the quarter.
The Details
Other pockets are also holding up. Own LA Chief Investment Officer Dan Tour highlighted Westlake Village, Thousand Oaks, and Agoura Hills in the Conejo Valley. He said wealthy residents, private practitioners, law firms, wealth managers, and accountants support smaller office suites there. Those tenants tend to use offices consistently and remain for longer periods. That can reduce rollover risk. Los Angeles office leasing has shown gains alongside persistent losses. The contrast reinforces the need to look below metro-wide averages.
Owners Shift Toward Smaller Tenants
Barker Pacific Managing Principal Mark Handin said the older model of relying on three or four large tenants is less common. His firm is targeting a larger number of smaller users. Those tenants can be more stable and often remain in place longer. That can also reduce tenant-improvement spending tied to repeated moves. Handin said regional credit and long operating histories can matter more than national-name tenants in the current environment. The strategy puts more emphasis on tenant durability than headline corporate scale. Panelists said this smaller-tenant approach is becoming more common because long-tenured local users can provide steadier occupancy than a few large moveable accounts.
Capital Follows Stronger Assets
Lenders are also differentiating between submarkets and individual properties. Handin said Barker Pacific recently solicited debt for an acquisition and received interest from 20 lenders. The group included banks and debt funds. Four lenders ultimately competed for the financing. That response suggests capital remains available for selected LA office assets. Location and a credible business plan still matter. The broader market’s difficult national reputation has not eliminated lender interest in stronger properties.
Why It Matters
Los Angeles is large and fragmented enough that citywide office statistics can hide major differences. Vacancy, leasing, tenant durability, and financing vary materially by submarket. Downtown remains deeply challenged, while Century City and several smaller Westside or suburban nodes are performing better. Investors and operators therefore need a more granular view than a single LA recovery narrative. Specific submarkets, tenant industries, building quality, rollover risk, and improvement costs can produce very different outcomes inside the same metro.
