Downtown Los Angeles office market report

Q4 2024

Office asking rates continued their upward trajectory in Q4 2024, rising to $49.04 per square foot, marking the fourth consecutive quarter of increases. This sustained growth can largely be attributed to rising operational costs, including higher utility expenses and maintenance fees. While overall availability edged slightly higher, leasing activity showed a notable improvement, signaling a gradual recovery in tenant demand. However, negative net absorption persisted, reflecting the ongoing challenges of excess office space in the market.

$49.04 psf

Rental rates

Office rental rates edged higher in Q4 to $49.04 per square foot, up slightly from $48.94 in Q3. This marks the fourth consecutive quarter of rental rate increases, primarily due to rising operating costs.

33.2%

Availability

Downtown Los Angeles total availability closed Q4 2024 at 33.2%, up from 33.0% in Q3. The Central Business District (CBD) recorded a 30.9% availability rate, a 90-basis-point increase from the previous quarter. This marks another year of rising availability since 2017, largely driven by continued remote work trends and tenant downsizing.

1.52 msf

Leasing activity

Leasing activity in Q4 2024 continued to pick up, with 509,690 square feet leased, an increase from 477,000 square feet in Q3. This contributed to 1.52 million square feet of total leasing activity in 2024, reflecting a 21.2% increase year-over-year.

-64.3k sf

Net absorption

Downtown Los Angeles recorded -64,303 square feet of net absorption in Q4 2024, a 600,000-square-foot improvement from Q3. Despite this modest progress, the market closed the year with -915,113 square feet of negative absorption, highlighting persistent vacancies, particularly in the Central Business District (-949,723 sf total for 2024).

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