Los Angeles Office Market Ends 2024 With Spike In Leasing Activity

Los Angeles' office market clocked its best quarter since 2020 to end 2024, with 3.9M SF of leasing activity, according to a Savills report.

Many top office markets across the country saw a spike in office leasing at the end of 2024, said Michael Soto, vice president of research covering the West region for Savills. 

The continued return-to-office push is playing a part. Companies also feel more confident about how much space they actually need and their ability to get attractive concessions from landlords for that space. 

“There is much more cautious optimism today than there has been since we went into Covid,” Soto said.

The fourth-quarter performance was an increase from the 1.7M SF of office leasing activity in the Los Angeles market at the end of 2023. 

However, the increase continues to be driven by renewals, Soto said. Among the top 10 transactions of the quarter, five were renewals and two of those were also contractions.

The largest lease of the quarter, by the Los Angeles Organizing Committee for the 2028 Olympic and Paralympic Games’ 106K SF lease in Downtown, was a relocation. Only one lease in the quarter was a brand new office: Boeing’s 76K SF new location in El Segundo.

The full-year leasing activity total was 13.7M SF in 2024, a far cry from the 17.9M SF the market racked up in 2019. 

Overall availability was down slightly quarter over quarter but, at 28.2%, was up 1.5% from 2023. 

Soto anticipates availability rates will stay high for “quite some time,” as there are still companies working through the process of rightsizing and also occupiers that have completed the process and determined that they need less space than they had before. 

But some indicators are pointing in the right direction, Soto said, pointing to the slowing of short-term lease extensions and a less aggressive pace to sublease space being put on the market. About 10.6M SF of sublease space was up for grabs in Q4 2024, down from 11M SF in the previous quarter and just slightly above 10.4M in the same period of 2023. 

“Even though the market's kind of bouncing along the bottom, the general feeling in the Los Angeles market is that at least it isn't deteriorating the way it was over the last few years anymore, so we can slowly start to recover and dig ourselves out of this,” Soto said.