Los Angeles County Q1 2020 Office Market Outlook
Market Overview
By all measures the Los Angeles County office market was poised to start the new decade as an extension of a record-breaking 2019 that included significant construction, rising rent and low vacancy until the COVID-19 shutdown.
Vacancy ended Q1 2020 at a low 10.4%, up 10 bps year over year despite nearly 2.4M SF of office space added to the market in that time. Completed construction was 78.5% leased at the end of Q1 2020. Office space under construction at the end of the quarter totaled 4.4M SF with 46.7% preleased. The average asking rent increased 0.6% from Q4 2019 and 2.1% year over year to a record-high $3.34/SF. LA West and Central showed some signs of rent flattening from Q4 2019 – down $0.01/SF and $0.02/SF, respectively. Leasing and sales volume combined totaled 6.6M SF in the region.
Market Outlook
Trends to Watch
- Tenants reassessing space needs, including work-from-home strategies
- Landlords offering more concessions to keep tenants
- Declining lease and sales volume until some certainty is restored
Los Angeles County Office Market
Average Asking Rent and Vacancy Rate
