Los Angeles Market Update: Vacancy Increases to Q1 Level

In August, office vacancy in metro Los Angeles continued its rough-and-tumble trajectory, increasing by 50 basis points month-over-month to 13.5 percent, CommecialEdge data shows. The metro is still below the national average (at 15.4 percent) and is closing in on the figure recorded in January (13.6 percent). Year-over-year, vacancy is up by 660 basis points, with some uncertainty still ahead for urban core properties.

Los Angeles’ entertainment sector remains a solid driver for activity, creating demand for production and creative office space. Compared to other gateway markets, Los Angeles maintains its second spot behind Manhattan—which recorded 10.8 percent vacancy in August. Chicago had the highest vacancy at 16.9 percent, and San Francisco’s reached 15.4 percent.

The office landscape continues to shift from the pandemic’s effects. As is the case with similar markets, suburban areas continue to be favored across the metro. In Burbank, for example, BMK Capital signed three tenants at its Backlot Burbank property. The submarket’s office vacancy reached 6.4 percent in August.

In August, office vacancy remained relatively unchanged in urban submarkets, such as the metro’s CBD (at 14.7 percent) or Hollywood (at 13.6 percent). Drops in vacancy were recorded in the Wilshire Corridor (down 140 basis points, to 10.0 percent) and West Los Angeles (down 80 basis points, to 13.1 percent) submarkets, among a few others.

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