Los Angeles Office Market Revives with Surge in Deals Towards End of 2023

At the close of 2023, the Los Angeles office market faced challenges in absorbing new office supply, despite a surge in investment activity. Notably, a remarkable office transaction kicked off 2024, showcasing significant growth in the sector.

Investment Activity in Los Angeles Metro

In 2023, investment activity in the Los Angeles office market picked up towards the end of the third quarter, with notable transactions including a significant purchase exceeding the metro's average price per square foot. Snapchat's parent company also secured a substantial long-term lease, signaling confidence in the market.

National Investment Landscape

While Los Angeles ranked fifth in investment volume among gateway cities, Manhattan led with the highest investment volume in 2023. In terms of total office square footage sold, the metro was second only to Chicago.

Price Trends and Significant Deals

High-quality assets commanded high prices in the Los Angeles market. Noteworthy transactions included Waterbridge Capital's acquisition of Union Bank Plaza and JP Morgan Asset Management's purchase of Pen Factory's West Building.

Recent Office Transactions

A significant sale in January 2024 involved Skanska selling 9000 Wilshire Blvd. for a remarkably high price. Additionally, the largest downtown LA lease was signed in late 2023, highlighting continued activity in the market.

Office Development and Construction

As of January 2024, office development in Los Angeles remained slow compared to other gateway markets. Notable projects include Century City Center and Harbor-UCLA Medical Center.

Flex Office Market

Los Angeles boasted a substantial flex office market, ranking second after Manhattan in terms of shared space. Cubework led in square footage, followed by WeWork and Regus.

Recent Developments and Leases

Premier Workspaces opened a new coworking office in Los Angeles' Century City district in April 2023, showcasing ongoing development and leasing activity in the market.