Leasing Activity Outpaces Historical Trends Even as Availability Edges Higher in Los Angeles Office Market

The Los Angeles office market is navigating a gradual recovery, with leasing activity advancing notably amid an evolving demand landscape. According to the latest report from Savills, quarterly leasing activity reached 3.7 million square feet for the three months ending June 30, marking an increase of 0.9 million square feet compared to the same period in 2024. This performance brought total leasing volume for the first half of the year to over seven million square feet, underscoring sustained tenant engagement despite persistent macroeconomic uncertainty. Overall availability in Los Angeles rose to 28.1 percent in Q2 2025, representing a 70 basis-point increase year over year and a 20 basis-point uptick from the prior quarter. While the rise in availability highlights continued slack in certain sectors, the reduction in sublease inventory suggests incremental progress toward market stabilization.

Savills reported that the region’s total office inventory declined to 214.1 million square feet, a reduction of 5.8 million square feet year over year. This contraction, alongside steady leasing activity, reflects a market gradually rebalancing as obsolete assets are repositioned or removed from inventory. The San Gabriel Valley submarket recorded the lowest availability at 12.4 percent, contrasting sharply with Marina/Playa Vista, where availability reached 37.8 percent. Available sublease inventory decreased significantly to 9.5 million square feet, down 1.3 million square feet compared to Q2 2024. Based on the report, average asking rents advanced 2.3 percent year over year to $3.99 per square foot, indicative of healthy demand for quality space in select corridors. Class A asking rents registered even stronger growth, increasing 3.7 percent to $4.25 per square foot. Despite rising rents, landlords continued to offer substantial concession packages and tenant improvement allowances to drive occupancy. Century City sustained the highest average asking rents in the region at $7.34 per square foot, buoyed by sustained interest from legal and financial occupiers. In contrast, the San Gabriel Valley recorded the lowest rents at $2.44 per square foot, while Culver City remained modestly above the market average.

Financial services and professional occupiers continued to anchor leasing velocity, highlighted by Oaktree Capital Management’s relocation lease comprising approximately 220,000 square feet at 555 S Flower Street in Downtown Los Angeles. West Coast University renewed its lease for 98,000 square feet at 12215 Victory Boulevard in the North Hollywood/Studio City/Universal City submarket, reflecting resilient demand in the education sector. AmeriHome Mortgage completed a renewal totaling 80,371 square feet at 1 Baxter Way in the West San Fernando Valley. Meanwhile, TelevisaUnivision secured 74,046 square feet at 5999 Center Drive in Marina/Playa Vista through a renewal and contraction transaction, while San Gabriel Pomona Regional Center signed a new lease comprising 53,414 square feet at 4900 Rivergrade Road in the San Gabriel Valley.

Overall, analysts expect Los Angeles’s office sector to remain characterized by selective leasing activity and incremental absorption of high-quality space. Limited new construction, combined with the re-entry of formerly distressed assets acquired by opportunistic investors, is anticipated to expand options for active occupiers over the coming quarters. Demand from the entertainment, media, and technology sectors is forecasted to remain subdued, while healthcare, education, and select retail occupiers are projected to drive leasing momentum through the rest of 2025.