Q2 2023 Office Market Outlook – Los Angeles
Market Overview
During 2Q 2023, the office market in L.A. County saw a deceleration in the rate of vacancies, as vacant
space increased by just 0.5% quarter-over-quarter, in contrast to a higher 10.6% year-over-year rise. The
total vacant space reached 61.6 million square feet, a significant figure influenced by the ongoing balance
between remote work and the return to the office.
Trends to Watch
In Q2, newly constructed office buildings in L.A. County, built since the pandemic shutdown in 2020,
witnessed a notable decrease in their vacancy rate. The vacancy rate for these buildings dropped by
over 7.1% quarter over quarter, reaching 32.1%. Although the vacant space in these new office buildings
remains more than double compared to a year ago, there is a gradual improvement in occupancy due to a
preference for low-rise quality space. Most of these new buildings are under 6 stories, with an average of
3 stories. Developers showed motivation to occupy these new office spaces, as shown by the decline in
the average asking rent, which decreased by 6.4% quarter over quarter, reaching $3.94 per square foot.
