Tenants looking for office space in Los Angeles have a lot of options right now. Many landlords are struggling to fill their buildings due to high vacancy rates. The office rental market in the greater Los Angeles area started the year with a rough first quarter and record-high vacancies. Despite some companies pushing for employees to return to the office, demand from tenants remains weak.
Countywide, the overall office vacancy rate has reached an alarming 24.2%, according to real estate brokerage CBRE. When considering “shadow” space—offices that are leased but not occupied—the availability jumps to over 29%. This is about three times what is considered a healthy balance between landlords and tenants.
Century City stands out as a bright spot in this market. The area is seeing low vacancy rates and some of the highest rents in the region. Real estate broker Gary Weiss noted that Century City is nearly fully leased, even with a new high-rise, the Century City Center, still under construction. This building is set to open early next year and already has major tenants like Creative Artists Agency and Sidley Austin lined up.
In contrast, downtown Los Angeles continues to face challenges. The vacancy rate here is nearing 34%, with overall availability at 37%. These numbers have increased slightly compared to last year. The downtown area has struggled for decades, but the pandemic has accelerated the trend of companies reducing their office space. This has led to falling property values and financial stress for some landlords, making it harder for them to attract new tenants.
Real estate experts had hoped for a recovery by the end of 2024 as more companies began to call employees back to the office. However, recent wildfires and economic uncertainties, including global tariffs, have caused setbacks. Analysts are concerned that this anxiety may lead to slower decision-making among businesses, which could impact future leasing and acquisitions of office space.
Despite these challenges, some businesses are still looking for large office spaces. For instance, the Los Angeles Department of Water and Power is planning to renovate its historic headquarters and needs about 300,000 square feet temporarily. This move could provide a significant boost to the office market.
As the landscape of office rentals in Los Angeles continues to evolve, Century City remains a standout example of resilience amid broader market struggles. While many areas are grappling with high vacancy rates, Century City’s strong demand and premium rents reflect a different reality.