Los Angeles Office Vacancy Declines, Prices Stay Elevated

Los Angeles’ office fundamentals entered 2026 with steady momentum, Yardi Matrix data shows.

Construction activity remained relatively elevated compared to its peers, while office completions slowed, mirroring national trends. Investor activity and sale prices continued last year’s positive traction, while vacancy decreased to one of the lowest recorded nationwide.

In the first month of 2026, Los Angeles’ pipeline comprised 2.6 million square feet across 12 projects underway—accounting for 0.8 percent of its existing stock. Among gateway cities, the metro ranked third, behind Boston’s roughly 5 million square feet. In contrast, Washington, D.C. had the smallest pipeline at 876,821 square feet underway.   

Long-running projects sustain construction activity

For competitive space specifically, the City of Angels’ office sector had roughly 2.1 million square feet under construction, accounting for 0.7 percent of its total stock—slightly above the 0.4 percent national average. When adding projects in the planning stages, Los Angeles’ figure accounted for 2.2 percent of its inventory, ranking seventh among the top 25 U.S. markets.

The Los Angeles office sector placed fourth among its peers in terms of development activity. Boston kept the top position with 4.1 million square feet, followed by Manhattan (2.8 million square feet) and Dallas (2.5 million square feet).

The top five largest projects underway totaled nearly 2.1 million square feet combined and include developments in the works since 2023 and 2024.

JMB Realty’s Century City Center remains the biggest office property under construction. The 724,583-square-foot tower broke ground in August 2023, backed by a $575 million construction loan, Yardi Matrix information shows. Completion is estimated for April this year.

During the first month of 2026, a single, 104,954-square-foot project came online in the metro. East End Capital owns the hi-tech office and film production facility dubbed East End Studios at Mission Campus, at 2233 Jesse St.

For context, developers delivered six projects totaling 373,704 square feet in 2025. That volume represented a 62 percent decline in completions growth when compared to a year prior, signaling a slower development pace as new supply continues to await absorption.

Los Angeles office sales activity builds on 2025 strength

Investors carried 2025’s strong sales momentum into the first month of the year. At the end of January, Los Angeles’ investment activity amounted to $63 million, ranking the metro sixth among gateway cities and 11th among the top 25 U.S. markets.

Manhattan led the ranking with $1.3 billion, while Miami followed with $506 million. The gateway markets outperformed by Los Angeles’ dollar volume were Boston ($61 million) and San Francisco ($44 million).

Los Angeles office space sold at $427 per square foot during the first month of 2026—well above the national average of $278 per square foot. This positioned the metro fourth among gateway markets. San Francisco’s sale prices stood out at $1,088 per square foot, outperforming Manhattan, where properties sold at $760 per square foot.

Last year, investor activity picked up pace quarter by quarter in Los Angeles. Carrying the solid pace established back in 2024, the metro’s total dollar volume for 2025 amounted to $2.9 billion—placing it on the fifth spot among the top 25 U.S. markets.

The largest office transaction recorded in January 2026 was The Luzzatto Co.’s roughly $40 million acquisition of the Binoculars Building in Venice, Calif. Net Lease Office Properties sold the 75,000-square-foot creative office property fully occupied by Google.

The biggest office deal that closed last year in L.A. was the $210 million sale of Figueroa at Wilshire.  Uncommon Developers purchased the 52-story tower in the Financial District. Brookfield Properties sold the 1 million-square-foot asset in June 2025, at a 41 percent discount from its previous $356.7 million trade.

Demand diversifies, flex space continues to grow

Los Angeles continued its strong coworking momentum as the metro’s inventory expanded to 7.6 million square feet across 343 locations at the end of January, according to CoworkingCafe. Additionally, flex office demand increased significantly from the 6.5 million square feet Los Angeles had at the end of December 2024.

The metro remained on the third spot among its peers for flex office inventory. Manhattan led with 12.6 million square feet, while Chicago followed with 9.1 million square feet.

The City of Angels’ amount of flex space accounted for 2.5 percent of the total leasable office inventory—above the national average of 2.2 percent and on par with Manhattan’s.

Regus remained the top flex office provider in Los Angeles, with operations totaling 737,902 square feet. Other companies with large footprints included Spaces (710,564 square feet), WeWork (709,408 square feet), Premier Workspaces (515,933 square feet) and Industrious (486,037 square feet).

Recently, TailoredSpace’s expanded in Burbank, Calif. The company added a 25,000-square-foot location, representing its 14th in the metro. Premier Workspaces also added another location in El Segundo, Calif., bringing its footprint to 31 flex office spaces in the metro.

L.A. office vacancy eases, rents on the rise

After years of sharp vacancy rates, most office markets posted falling rates last year, inclining toward signs of stabilization. At the end of the first month of 2026, Los Angeles’ rate clocked in at 14.6 percent—significantly lower than the 18.2 percent national rate and marking a 170-basis-point year-over-year decline.

The City of Angels’ rate was among the lowest nationwide and placed fourth. Manhattan’s 13.1 percent emerged as lowest in the U.S., while Miami and Tampa followed with 13.9 percent and 14.2 percent, respectively. On the opposite end of the list remained Seattle’s 27 percent rate—the highest rate among the top 25 U.S. markets.

The average asking rents in the City of Angels reached $46.50 per square foot, well above the national average of $32.55 per square foot. The metro’s listing rates recorded a 10.7 percent rise year-over-year—the second-highest increase nationwide, after Atlanta’s 11.2 percent.

The metro’s average rent placed it fifth among the top 25 U.S. markets. Manhattan led at $67.36 per square foot, followed by San Francisco ($63.84 per square foot) and Miami ($56.03 per square foot). On the other hand, Chicago remained the gateway city with the cheapest average rents, at $28.75 per square foot.

One of the largest leases of 2025 was Spin Master’s 132,300-square-foot commitment at The Collective, a five-building office campus. Tishman Speyer owns the property in the West Los Angeles neighborhood of Playa Vista. The children entertainment company will move to its new location in November this year and will occupy three buildings.