L.A. Office Market Rebounding — Slowly — Coming Into 2026

Office leasing activity in Los Angeles improved slightly in 2025, and reached a new post-pandemic high. But the market still has a long way to go before returning to pre-2020 levels, a new report shows. 

Activity across L.A. hit 14.3 million square feet in 2025, which is the most recorded on an annual basis since the pandemic began and 600,000 square feet over the previous year, according to Savills’ latest quarterly market report. That’s an improvement of about 4 percent compared to 2024. 

Incremental rent growth has followed the uptick in demand, with average asking prices hitting $4.03 per square foot per month in the final quarter of 2025 — up 2 percent year-over-year. Class A rents, particularly in trophy markets such as Century City, increased by an average of 3.1 percent to $4.30 in the same period, per Savills. 

Tenant decisions remain highly selective given the nature of L.A.’s still-recovering office ecosystem, with renewals and relocations accounting for nearly 56 percent of all leasing activity over expansions. Yet the three largest leases inked in the fourth quarter are evidence of growing confidence. 

Farmer’s Insurance, for example, signed a 251,774-square-foot headquarters renewal at Douglas Emmett’s 6301 Owensmouth Avenue in Woodland Hills, after having previously announced intentions to sublet the entire complex. Still, not everything in Farmer’s world is peachy — the insurance giant plans to pull out of its former space at the adjacent 6303 Owensmouth Avenue, per Savills. 

United Talent Agency, meanwhile, inked a 193,591-square-foot renewal at its namesake UTA Plaza in Beverly Hills. The talent agency has operated its headquarters out of the complex, owned by DivcoWest, since 2011. Aerospace and defense company Northrop Grumman rounded out the top three with a 124,400-square-foot renewal at Miramar Capital’s 3701 Doolittle Drive in Redondo Beach. 

While promising, L.A.’s office market is still barely off of life support. Availability across the L.A. County was a blistering 27.6 percent in the final quarter of 2025, though it had decreased by 60 basis points year-over-year. Office availability is particularly pronounced in submarkets such as Culver City and Miracle Mile, per Savills, at 37.8 percent apiece. L.A. leasing activity in general still remains well below the 17.9 million square feet recorded in 2019, before COVID spawned a work-from-home trend that disrupted the office market. 

Excess supply, and elevated sublease inventory in particular, are the most obvious culprits. While available sublease space dipped to 8.4 million square feet this past quarter — down from 8.7 million in the third quarter and 10.6 million in the final quarter of 2024 — sublease activity remains roughly double pre-pandemic levels, according to Savills researchers. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.