United States: Los Angeles office market - H1 2026
The Los Angeles office market continues to face headwinds as occupiers prioritize efficiency over expansion, resulting in ongoing space givebacks and muted demand.
Demand Remains Under Pressure
The Los Angeles office market continues to face headwinds as occupiers prioritize efficiency over expansion, resulting in ongoing space givebacks and muted demand. Hybrid work patterns and corporate footprint optimization remain key drivers of elevated vacancy and availability, keeping market conditions favorable for tenants. While asking rents have generally remained resilient, landlords continue to rely on concessions and flexible deal structures to compete for a limited pool of active tenants.
Limited New Supply Supports Long-Term Balance
Development activity remains restrained as higher construction costs, tighter financing conditions, and uncertain leasing fundamentals discourage new projects. With relatively few new buildings entering the market and the construction pipeline continuing to thin, future supply growth is expected to remain limited. Although demand has yet to fully recover, constrained development should gradually help the market move toward better balance as leasing activity improves over time.
Discounted sales driving activity
Investment activity in the Los Angeles office market remains subdued but continues to show gradual improvement. Transaction volumes have recovered since 2024, but 2026 is on track to match 2025 levels. Investor activity remains pressured by high vacancy, uncertain office demand, and tight lending. These conditions have shifted the buyer pool, with owner/users and private investors accounting for a growing share of acquisitions while institutional capital remains largely on the sidelines. Recent deals show a continued interest in well-located assets priced well below their pre-pandemic values. While improving capital markets should help transaction volumes recover, elevated vacancy and pressure on property fundamentals will likely limit price growth in the short term.