In a recent interview, we explored the thriving office rental market in Los Angeles, where a significant rebound has been observed in the third quarter of 2024. According to Savills, a prominent real estate service provider, Los Angeles County’s office leasing activity has surged by 27% compared to the same quarter last year, signaling a post-pandemic recovery.
While the current average monthly rent remains steady at $3.90 per square foot, the question of whether the market has truly turned a corner remains uncertain. During the pandemic, office leasing in Los Angeles County significantly declined due to the rise of remote work. However, recent trends indicate a gradual recovery, even as the vacancy rate continues to climb.
Savills’ data reveals that the office leasing volume in Los Angeles reached 3.8 million square feet in the third quarter, marking the highest level since the onset of the pandemic four years ago. This increase nearly returns the market to its leasing volume of 4 million square feet seen in the first quarter of 2020. Nevertheless, the office vacancy rate in Los Angeles is on the rise, hitting 28.3% in Q3 2024, up 0.9% from the previous quarter and 1.8% from last year.
Despite these challenges, average monthly rent for offices has remained consistent at $3.90 per square foot. The trend of “quality over quantity” has notably driven up rents for Class A office spaces in Century City and across Southern California, with a year-over-year increase of 1.7%.
Although there has been growth in office-related employment—particularly in the tech and entertainment sectors—the increase in leasing activity calls for cautious optimism. The report emphasizes that “office leasing activity will be closely monitored to determine if the Los Angeles office market has stabilized or if further recovery is still needed.”
This summer, standout office leasing deals included Southern California Gas Company’s lease of 198,600 square feet at 350 South Grand Avenue and JPMorgan Chase’s renewal and expansion agreement for 162,700 square feet at 2029 Century Park East in Century City. These transactions reflect a renewed interest in office spaces as businesses navigate post-pandemic challenges.
