Office Investment Rebounds As LA Market Hits Bottom

Office investment in LA doubles year-over-year as brokers say the market has hit bottom and buyer confidence begins to return.

August 5, 2025

Nina Dale

LA’s office investment sales more than doubled year-over-year, hitting $1.2B in Q2 2025, up from $467.7M in Q2 2024.
Brokers believe the market has hit bottom, citing increased comparables, distressed asset sales, and returning institutional capital as key indicators.
Nearly half of LA’s office inventory is “economically unviable”, with distress creating opportunities for value-seeking buyers.

Key Takeaways

Turning Point In LA’s Office Market

After a prolonged slump, Los Angeles’ office investment market is showing signs of revival, reports Bisnow. Brokers and capital markets experts say Q2 2025 marked a potential bottoming out of the market. Total office sales reached nearly $1.2B—more than double the volume from the same quarter last year.

According to Newmark, five deals over $100M helped propel the surge, signaling that large-scale investors are stepping back into the game.

Comps, Clarity, And Confidence

What’s driving the change? According to Colliers’ Sean Fulp, the growing number of comparable sales is restoring confidence among investors. This includes institutional players who have largely stayed on the sidelines. “There’s enough information for even institutional investors now to assess the trajectory of the market,” Fulp said.

Newmark’s Kevin Shannon added that the lack of price transparency had been a major barrier. But with more deals closing, buyers now have a clearer sense of pricing trends.

Distress Brings Opportunity

The LA office market remains challenged, with about 25% vacancy and 47% of inventory deemed “economically unviable.” However, that same distress is fueling investment activity.

Properties under financial pressure, often with occupancy below 70%, are increasingly hitting the market as loan maturities loom. Investors are targeting these assets at discounted prices, resetting debt terms and offering lower rents to lure tenants, said Newmark’s Dain Fedora.

Who’s Buying?

Private investors continue to dominate 2025’s activity, accounting for two-thirds of sales so far. However, REITs and institutional players are gradually returning, driven by compelling value in well-located, Class-A properties.

“The REITs are starting to play offense,” Shannon noted, referencing Barings’ $151M purchase of an office in Playa Vista as an example of institutional re-entry.

What’s Next

While the uptick in sales volume is a positive sign, brokers warn that recovery will be gradual. Fulp projects a multi-year process of working through a backlog of distressed assets. Higher borrowing costs and hybrid work will continue to weigh on fundamentals.

Still, with more data, more buyers, and more deals in motion, the bottom may finally be behind LA’s office market.