Los Angeles office market report

Q4 2022

All major office-using job sectors have been affected by mounting economic headwinds, though the tech sector has been especially impacted. Average asking rates for Los Angeles office spaces held steady at $40.76 psf full-service annually, or $3.40 on a monthly basisat the end of 2022. Several companies have postponed expansion efforts in preparation for upcoming economic headwinds.
3.7 msf

Inventory

At the end of 2022 there was 3.7 million square feet of new office construction underway. This is downwhen compared to the end of 2021, when 5.4 million square feet was under construction.
-2.5 msf

Net Absorption

There was 2.5 million square feet of negativeabsorption in 2022, nearly matching 2021’s total of 2.4 million square feet of negative absorption. This represents 0.7% of the total inventory.
0.94%

Direct Asking Rent

For the 12th year in a row, lease rates continued to increasein Los Angeles. At the end of 2022, the asking lease rate for office space was $40.76 a square foot on an annual basis, or $3.40 on a monthly basis. This is an increase of 0.94% over 2021.
19.9%

Availabilities

The availability rate for the Los Angeles office market came in at 19.9% for the last quarter of 2022. The amount of available space has remained in the high teenssince the beginning of the pandemic.
16.3%

Vacancy

Total vacancy this quarter registered 16.3%, with 14.6% direct and 1.7% sublet. Sublet space has increased from 9 million square feet at the end of 2021 to 11.5 million square feet at the end of 2022.
10.4%

Investment Sales

Investment sales volume increasedby 10.4% when compared to 2021. While total sales volume in 2021 was $3.38 billion, 2022 came in at $3.73 billion. We also witnessed the price per square foot increase by 22.6%.
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