Greater L.A. Office Leasing Shows Signs of Life — Finally

It’s still not “back,” but it’s getting more difficult to say Los Angeles’ office market is “dead.”

Tenants signed for nearly 4 million square feet of office space across Greater L.A. in the second quarter, according to a new report from Savills. That’s almost 15 percent more than the previous quarter, and almost 8 percent more than the same period last year.

The quarterly total is also 22 percent above the five-year quarterly average for office leases, and is approaching levels last seen in 2019. However, Savills reported the recovery remains uneven, and it is still largely fueled by renewals and relocations rather than new demand.

Bank of America signed the largest deal in the quarter with a 137,873-square-foot renewal and expansion with Hines and J.P. Morgan Chase at the south tower of the prominent Century Park Plaza at 2049 Century Park East in Century City. Other notable deals included LA28’s 57,512-square-foot expansion in Downtown L.A., as well as Arrowhead Pharmaceuticals’ 52,568-square-foot renewal and 49,449-square-foot expansion with Rockpoint at 177 East Colorado Boulevard in Pasadena.

Meanwhile, another 2.8 million square feet of available sublease space came off the board over the past 12 months for a nearly 30 percent annual decline. Total available sublease space also fell from 7.4 million square feet to 6.7 million square feet in the second quarter alone, marking the seventh straight quarter of declining sublease supply. L.A.’s sublease space peaked at 11 million square feet in 2024.

Savills noted some of the improvement in sublease availability resulted from leases expiring and reverting to general availability, rather than tenants actively absorbing the secondhand space. As such, overall availability in L.A. stood at 26.6 percent in the second quarter, down just 130 basis points from a year ago, despite the 4 million square feet reported.

Similarly, average direct asking rent was $4.19 per square foot per month in the second quarter, down 0.4 percent from the prior quarter, but up 1.1 percent from a year ago.

Century City and Beverly Hills commanded the highest asking rents in Greater L.A., averaging $7.67 and $6.71 per square foot per month, respectively. Beverly Hills posted 4.7 percent year-over-year rent growth, while Century City remained flat from last year.

Savills also reported landlords are still offering concession packages near historic highs to compete for tenants, keeping net effective rents well below quoted rates.

On the investment sales side, Savills expects distressed assets transitioning to new ownership — such as Capital Group’s $210 million acquisition of Bank of America Plaza — could help accelerate leasing activity.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.