Los Angeles Market Update: Office Pipeline Shrinks

As of August, Los Angeles had 7.9 million square feet of office space under construction, representing 2.8 percent of total stock, according to CommercialEdge data. Construction starts have slowed down, and month-over-month the pipeline shrunk by 3.6 percent. Construction activity is on par with last year’s figures—Los Angeles had 7.9 million square feet under construction in August 2020 as well.

With just over 5.9 million square feet of office space that remains slated for a 2021 completion, Los Angeles is bound to outperform 2020’s activity—which saw the addition of 2.3 million square feet of new office space. However, it is likely that some developments will continue to see delays, as several projects were initiated before the global health crisis—more than 6.7 million square feet of office space is comprised in projects that broke ground in 2019 or sooner. Over the first eight months of the year, 1.6 million square feet of office space came online in the metro, some 300,000 square feet shy of what was delivered over the same period last year—1.9 million square feet.

Two properties came online in August, totaling just over 150,000 square feet. In the Los Angeles CBD, redevelopment efforts were completed at The Herald Examiner Building—at 1111 S. Broadway—, which now boasts 100,000 square feet of creative office space. The Georgetown Co. initially started working on the 1914-era building in 2017. Arizona State University will be leasing space in the new space. The city’s CBD had roughly 3 million square feet under construction in August, most of which is comprised of similar redevelopment projects. Brookfield Properties’ reimagining of California Market Center, for example, totals over 1.8 million square feet, and is expected to be completed soon.

In South Los Angeles, Vella Group finished work on an office campus at 12515 Cerise Ave. in Hawthorne. The project was a ground-up development custom-built for Ring, the Amazon portfolio company. The home security provider will relocate to the new, 62,000-square-foot office, from its current office in Santa Monica.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.