Market Report: Los Angeles

Downtown Los Angeles is feeling the pressure, with retail availability rising sharply, up over 200 basis points since early last year, now sitting at 10.9% in Q3. Store closures and bankruptcies have hit hard, pushing almost 400,000 SF of new space onto the market in just the past year, and net absorption sits deep in the red at -280,000 SF.

While single-tenant retail vacancies have improved slightly since mid-2024, they’re still above the norms seen from 2015 to 2019. Multi-tenant properties are struggling more, with availability above 10%, the highest in over a decade, after notable closures like Macy’s at The Bloc and Vans on Broadway.

Despite challenges, Downtown LA’s central location remains attractive for tenants looking for access to employers, courts, and transit. The 2023 completion of the Regional Connector has further strengthened Downtown’s role as the heart of LA’s public transportation network. But concerns over homelessness, crime, and a slow office-worker return continue to weigh on demand.

Rents have dipped 1% over the last year, matching the broader LA trend. Over five years, rents are up 8.1%, just trailing the citywide 9%. Historically, Downtown has averaged 1.5% annual rent growth, a pace not expected to return until at least 2027.

Downtown LA has added more retail space than most LA submarkets in the last decade, with about 150,000 SF of net new supply, but with no new construction underway, oversupply isn’t a concern in the near future.