Los Angeles Office Sales Maintain Strong Momentum

Los Angeles carried forward the solid pace it established last year, according to the latest Yardi Research Data. Year-to-date through May, office pricing placed the City of Angels in second place among the nation’s top-performing markets. Investor appetite also remained steady through the first five months of the year, with sales volume surpassing $1 billion—securing L.A.’s spot once again among the leading metros for office deals.

Construction activity improved as developers kept adding new projects to the pipeline. The metro recorded some significant new leases and renewals, while average asking rents held steady.

Strong deals put L.A. among top performers

Los Angeles’ office investment volume reached approximately $1.1 billion in May. The amount placed the metro on the fifth spot among the top 25 U.S. markets. Across gateway cities, Manhattan led the rankings with nearly $2.8 billion in deals, followed by Washington, D.C. ($2.6 billion) and Los Angeles, which surpassed Chicago ($794 million) and San Francisco ($769 million).

The biggest transaction since the start of the year was Fenway Capital Advisors’ $130 million acquisition of The Entrada, a 325,000-square-foot creative office building in Culver City, Calif. The property changed hands from Lincoln Property Co. at an average of $400 per square foot.

Another notable deal was Kingsbarn Realty Capital’s $105 million purchase of a 115,591-square-foot mid-rise at 1601 Vine St. The Class A property is anchored by Skims and was sold by J.H. Snyder Co at $908 per square foot in April.

As of May, office properties in the metro changed ownership at $281 per square foot—significantly above the national average of $194 per square foot. The City of Angeles maintained its place among the most expensive markets in the U.S. and emerged as the runner-up, while Manhattan ranked first with $448 per square foot. Chicago continued to post some of the most affordable sale prices in the country, with $59 per square foot.

Office rents keep steady in L.A.

As of May, the metro’s listing rates stood at $41.93 per square foot—above the national average of $33.15 per square foot. Among gateway markets, Manhattan led with $68.08 per square foot, followed by San Francisco ($63.01 per square foot), Miami ($57.71 per square foot) and Boston ($46.06 per square foot). In contrast, Chicago posted the most affordable rents at $27.88 per square foot.

Notable leases that closed since the start of the year include a 132,300-square-foot deal signed by Spin Master. The company inked the relocation agreement at The Collective, a five-building creative office campus owned by Tishman Speyer. The deal marked the largest leasing agreement signed in the West Los Angeles neighborhood of Playa Vista in the past two years.

During the same period, UCLA Health also renewed its 22,224-square-foot commitment at 2825 Santa Monica Blvd., a medical office property owned by Harrison Street Real Estate Capital. The space accommodates a research lab and medical offices for UCLA Health’s Jonsson Comprehensive Cancer Center.

Los Angeles construction pace progresses

As of May, Los Angeles had 2.7 million square feet of competitive office space underway spread across 14 properties, representing 0.8 percent of existing stock—below the national average of 0.9 percent. Among gateway markets, Boston led with 2.2 percent, while also having the largest pipeline at 6.5 million square feet of competitive space under construction.

In terms of square footage, Seattle (4.7 million square feet) and Manhattan (4.3 million square feet) outperformed Los Angeles, while its under-development pipeline ranked fourth among gateway cities.

The list of the largest developments in the metro remained unchanged since the end of 2024: Century City Center, totaling 731,250 square feet, is the biggest office project in Los Angeles in term of square footage. JMB Realty started construction in 2023 on the 37-story property, with completion scheduled for early 2026.

The second-largest project underway is Echelon Studios’ office component at 5601 Santa Monica Blvd., totaling 388,000 square feet. The creative office and studio project is part of the company’s 600,000-square-foot campus project and broke ground in late 2024, while delivery is estimated for April next year.

During the first five months of this year, developers broke ground on a single property totaling 326,000 square feet, accounting for 0.1 percent of the metro’s stock. Meanwhile, two properties totaling 147,207 square feet came online, marking a 49.7 percent drop year-over-year.

A notable completion is the 145,000-square-foot Forge at Alloy, a six-story office building developed by Carmel Partners. The property is part of the developer’s mixed-use project in the city’s Arts District, known as Alloy, that also includes a 475-unit apartment tower.

L.A.’s favorable landscape for residential makeovers

As the office sector continues to struggle with returning to pre-pandemic occupancy levels, office-to-residential conversions have become a viable option for property owners. Multiple states have introduced initiatives and tax incentive programs to support these efforts, such as the Los Angeles Adaptive Reuse Ordinance.

The Conversion Feasibility Index is a Yardi-powered tool that helps evaluate a building’s potential for multifamily conversion using a set of property-level scores, categorizing them into three tiers based on their suitability for conversion.

One such endeavor is the repurposing project of a 620,000-square-foot office building at 1055 W. Seventh St. in the city’s downtown area. Jamison Services, that has multiple similar projects in Los Angeles, plans to convert the 1987-built office tower into 686 apartments, according to GlobeSt. Yardi Research Data shows a CFI score of 80 points, making it a Tier II candidate.

A steady coworking footprint

As of May, Los Angeles’ coworking sector reached nearly 7 million square feet across 303 locations. The metro had the third-largest inventory among gateway markets, after Manhattan (11.4 million square feet) and Chicago (8.3 million square feet). The metro’s share of flex space as percentage of total leasable office space stood at 2.3 percent—above the national figure of 2 percent and on par with Manhattan— while Chicago led with a 2.5 percent figure.

The flex office provider with the largest footprint in Los Angeles remained Regus, with operations totaling 737,902 square feet. The list of companies that followed remained the same since our previous market update, namely Spaces (731,315 square feet), WeWork (709,408 square feet), Industrious (526,039 square feet) and Premier Workspaces (498,735 square feet).