Los Angeles Office Market Performance in First Half of Year Revealed

In the first five months of 2024, Los Angeles' office market faced ongoing challenges due to a decrease in new supply and a declining pipeline of under-construction properties. According to CommercialEdge, the city's construction activity was down, with a total of 2.6 million square feet of office space underway across 14 projects. This represents just 0.8 percent of the existing office stock, falling below the national average of 1.4 percent.

Comparative Development Trends

Although Los Angeles' pipeline is smaller relative to its total office space compared to cities like Boston, which leads with 4.9 percent, it still surpassed Chicago's 1.8 million square feet in development. Other cities such as Manhattan, San Francisco, and Washington, D.C. also reported larger pipelines, reflecting a trend of varied development scales across major metropolitan areas.

Major Projects

Among the notable projects in Los Angeles, JMB Realty’s Century City Center stands out. This 731,250-square-foot Class A office tower is scheduled to open in early 2026. The Harbor-UCLA Medical Center, a 370,000-square-foot facility, will include medical, research, and support spaces and is set for completion in September 2026. Additionally, the NBC Universal Office Building, a 331,000-square-foot project in Studio City, is expected to be finished in July as part of a broader mixed-use campus.

Office Space Transactions

Throughout the first five months of 2024, Los Angeles saw 740,108 square feet of office space change hands, totaling $261 million in transactions. The average price was $368 per square foot, placing Los Angeles among the most expensive office markets in the country. Significant transactions included Flutter Entertainment’s $70.5 million acquisition of a 50,148-square-foot building in Beverly Hills and the $50.3 million sale of The Annex to Westside Neighborhood School.

Leasing Activity

In January, Snap Inc. secured a substantial lease extension at Santa Monica Business Park, committing to 467,000 square feet over ten years. Other notable leases included Kilroy Realty’s agreement with Com2uS for 12,000 square feet at Sunset Media Center. By the end of May, Los Angeles maintained its position as the second-largest coworking hub in the U.S., with 4.3 million square feet of coworking space, trailing only Manhattan.

Coworking Sector

Los Angeles’ coworking sector, which comprises 2.2 percent of total office space, exceeds the national average of 1.8 percent. Cubework leads the market with the largest coworking footprint, followed by WeWork, Regus, Spaces, and ReadySpaces. Industrious also expanded its presence in April, adding two new locations to its growing footprint in the city.