Market Report: Los Angeles

The DTLA retail market continues to show modest signs of recovery, though overall momentum remains measured. Rents have steadily inched upward from 2022 through 2025, closing Q3 2025 at $2.97/SF/mo, reflecting incremental quarterly gains since mid-2023. This improvement aligns with a slow return of tenants to the urban core, especially in mixed-use corridors around South Park and the Arts District.

Vacant and available square footage remains elevated, fluctuating just above 1.1 million SF, indicating that while absorption has improved, space turnover remains a consistent factor. Leasing activity has normalized following pandemic-era lows, with quarterly volumes averaging around 15,000-20,000 SF. The number of deals leased has trended slightly downward (from 11 in Q3 2023 to 6 in Q3 2025), suggesting fewer but larger leases are closing.

Overall, DTLA’s retail environment is in a stabilization phase, rents are firming, vacancy is flattening, and tenant retention is improving. The submarket still faces elevated supply relative to historic norms, but rent resilience points to renewed confidence from local operators and national chains seeking urban visibility.