Office Leasing in LA County Jumps 129% Year-Over-Year

Office leasing has bounced back across Los Angeles County, jumping nearly 2 million square feet in a year.

The L.A. office market had its best quarter since the dawn of the pandemic, with 3.9 million square feet in the last three months of 2024, from 1.7 million square feet a year earlier, according to Bisnow, citing a report from Savills. That works out to a gain of 129 percent.

A return-to-office required by employers has played a part. Companies are more confident about how much space they need and their ability to negotiate concessions from landlords.

“There is much more cautious optimism today than there has been since we went into COVID,” Michael Soto, vice president of research covering the West for Savills, told Bisnow.

The rise in leasing, however, continues to be driven by renewals, Soto said. Of the top 10 deals last quarter, five were renewals and two were also contractions.

The largest lease, signed by the Los Angeles Organizing Committee for the 2028 Olympic and Paralympic Games, was for 106,000 square feet in Downtown, which represented a relocation.

Only one lease was a brand new office, for which Boeing signed a deal for 76,000 square feet in El Segundo, Bisnow reported.

Last year, companies across L.A. County leased 13.7 million square feet of offices, compared to 17.9 million square feet in 2019, before the pandemic. Overall availability dipped quarter over quarter to 28.2 percent, but rose 1.5 percent from 2023.

Soto predicted office availability would stay high for “quite some time,” as there are still firms working through the process of “rightsizing.” Some companies also may find they need fewer offices than before.

But some indicators point in the right direction, he said, including a slowing of short-term lease extensions and fewer office subleases entering the market.

Some 10.6 million square feet of office subleases were listed across the county last quarter, down from 11 million square feet from the prior period, and up from 10.4 million square feet year over year.

“Even though the market is kind of bouncing along the bottom, the general feeling in the Los Angeles market is that at least it isn’t deteriorating the way it was over the last few years anymore, so we can slowly start to recover and dig ourselves out of this,” Soto told Bisnow.

— Dana Bartholomew