q1 2023 market reports

Negative net absorption totaled 739,811 SF, which increased the vacancy rate by 60 basis points to 22.5%. This represents nearly 50M SF of vacant office space, 61% more than the amount in 2019 when the vacancy rate was 14.3%. An additional 148,402 SF of sublease space was put on the market in Q1 2023, increasing the sublease availability rate to a new record of 4.7%.

Map of the Base SF, Vacancy Rates, YTD Absorption, and Average Asking Rates of submarkets across the Greater Los Angeles Basin.

The total availability rate in Downtown is the highest of any major office market in Los Angeles. The vacancy rate continued to increase, up to 110 basis points over the quarter to 26.2%. Leasing activity in Q1 2023 was down by 14.5% from the previous quarter and was half the amount recorded in Q1 2022.

Office construction is most active in West Los Angeles with the commencement of two major developments during this downturn. Over 500,000 SF of projects delivered in Q1 2023, leaving 1.1M SF in the pipeline. This is more than half of the overall Los Angeles total of 1.8M SF.  Century City's vacancy rate of 12.9% is lowest of any submarket in Los Angeles. 

Net absorption in Hollywood/Mid-Wilshire was slightly positive with some occupancy growth in Mid-Wilshire. The average asking rental rate has decreased from pre-pandemic levels by 4.5% in Hollywood and 13.6% in Mid-Wilshire.