September 15, 2025
The Greater Los Angeles office market posted mixed results in Q2 2025, with leasing activity holding steady at 7.0 million square feet year-to-date—mirroring the first half of 2024—but overall vacancy rising slightly to 24.4%
Finance, legal, and healthcare tenants drove demand, while technology, media, and entertainment remained cautious in committing to long-term space strategies. Sublease availability fell to 4.2%, its lowest level in three years, signaling that much of the excess pandemic-era space has been absorbed
Average asking rents increased 1.8% year-over-year to $3.92 per square foot per month, with Class A space commanding $4.22. Roughly 2.3 million square feet remain under construction, concentrated in West Los Angeles and Hollywood, with most completions expected by year-end 2026.
Performance varied widely by submarket. Century City continued to lead West Los Angeles leasing, accounting for 27% of activity and achieving 5.2% annual rent growth. Downtown Los Angeles struggled with a 29.7% availability rate, while Hollywood/Mid-Wilshire reached a record 30.2% due to media consolidation. The Tri-Cities market posted modest rent gains but faced the region’s highest sublease rate at 5.2%. In contrast, San Gabriel Valley saw availability drop to 11% on strong healthcare and government demand, and the San Fernando Valley recorded leasing growth led by finance and healthcare tenants.
Overall, the market shows early signs of stabilization, but recovery remains uneven. Location, building quality, and tenant mix will continue to define performance across Los Angeles office markets through the next 18 months.
