Retail demand across Greater Los Angeles has weakened over the past year, with net absorption totaling -2.6 million SF. This represents one of the softest performances among major U.S. metros when adjusted for market size. As a result, availability has increased from 5.7% to 6.3% year-over-year. The region’s retail sector continues to face several persistent headwinds limiting space demand.

Population decline remains a central challenge. While recent census data showed slight year-over-year growth, the broader five-year trend reflects a 3.3% population loss—roughly 340,000 fewer residents. This has hindered household formation and dampened retailer confidence in expansion, especially when compared to high-growth Sun Belt metros.

Economic performance has also lagged behind national benchmarks. Los Angeles County continues to report one of the highest unemployment rates in the country. High-wage sectors like tech and media have shed jobs, while the entertainment industry has yet to fully recover from the 2023 writers’ and actors’ strikes. According to the Bureau of Labor Statistics, employment in the information sector—home to many of these jobs—is down roughly 25% from its 2022 peak.

Suburban retail nodes have held up relatively well. Larger submarkets like Glendale and Torrance report availability rates near 4%. In contrast, more urban areas, particularly the corridor from Downtown Los Angeles to Santa Monica, face higher vacancies driven by ongoing demand challenges. These include reduced international tourism post-pandemic and heightened concerns around crime and homelessness.

Santa Monica stands out with the highest availability among major submarkets, nearing 15%. The decline is especially visible along the 3rd Street Promenade, once a bustling tourist draw now marked by notable vacancies. Other high-density, tourism-dependent areas—such as Beverly Hills, Hollywood, and West Hollywood—also report elevated availability rates of 9% or more.

Looking ahead, conditions are expected to remain soft. Forecasts call for continued vacancy increases in the near term as economic and demographic pressures persist, likely suppressing tenant demand further.