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Los Angeles office vacancy rate rises as Downtown and Hollywood shed space
CBRE data show LA posted negative absorption of 432,000 square feet in Q2 and about 3 million square feet over the prior 12 months.
Los Angeles remains an outlier in the office market recovery, with its vacancy rate rising to 25.8% in the second quarter as Downtown and the Hollywood and Wilshire Corridor submarket continued to empty out even as Century City attracted tenants, according to CBRE data cited by Bisnow.
While vacancy tightened in more than half of major U.S. markets in Q2, LA’s vacancy climbed, driven by steep increases in Downtown and the Hollywood/Wilshire Corridor. Downtown vacancy reached 35.3%, and the Hollywood/Wilshire Corridor reached 28%, while the vacancy rate on the Westside held at 23%, supported by Century City.
Bisnow reports that CBRE Vice Chair Jeff Pion attributed the slower recovery to LA’s creative-heavy tenant base, including streaming, tech, and entertainment firms, which has returned to offices more slowly than financial and legal users that have helped absorption on the Westside.
The outlet also said negative absorption totaled 432,000 square feet in Q2 and about 3 million square feet over the last 12 months. Total leasing activity in LA was 4.5 million square feet in Q2, down 12.4% from 5.1 million square feet in Q1 but higher than 3.8 million square feet in the year earlier quarter.