- 2025 marked a pivotal recovery for DTLA's Class A office market, recording approximately 446,000 sf of positive net absorption—the highest annual total since 2016. This surge represents a decisive inflection point, ending a five-year streak of negative absorption and signaling a potential reversal of the prolonged structural headwinds that have challenged the submarket.
- The dramatic rebound follows the market's deepest cyclical trough in 2024, which saw a record contraction of -915,000 sf. This steep decline likely catalyzed a necessary reset, creating favorable conditions for tenant mobility and setting the stage for a flight-to-quality movement, as evidenced by the subsequent year's strategic leasing activity.
- Demand was driven by a diversified mix of strategic expansions and owner-user acquisitions, indicating a shift toward more stable, long-term occupancy. Key transactions—including SoCal Gas (50,000 sf), Fashionphile (37,000 sf), and commitments from public entities like the MTA and LA Metro—underscore a growing commitment to the district's premier assets, moving beyond traditional corporate leasing to more foundational sources of demand.
Los Angeles
Ka Lok Marco Chung
