— By George Crawford of Kidder Mathews —
In the city where heart-wrenching Hollywood movies originate, we bear witness to the harrowing coming-of-age story for one of the largest office submarkets in one of the largest metropolitan economies on earth, Downtown Los Angeles (DTLA).
“I’m going to make him an offer he can’t refuse.”
The Godfather, spoken by Don Vito Corleone
It was almost too good to be true. In 2016, DTLA was the star of a commercial real estate love story. Landlords and tenants were captivated by a compelling script about creative tenants fleeing the expensive Westside into the welcoming arms of DTLA and sexy adaptive reuse offices.
A steady flow of capital inspired 50 percent of DTLA’s submarket to trade in a 24-month period. Downtown was poised to rival the traditional metropolis, while retaining its gritty charm. Like any Hollywood romance, the chemistry was undeniable and the ending seemed predictable: sustained rent growth and long-term tenant demand.
Then came the plot twist.
“Where are we going so very quickly?”
The New Adventures of Winnie the Pooh, spoken by Piglet
The pandemic accelerated what technology had been threatening for years. Workplace flexibility and changing corporate priorities left DTLA’s office submarket facing a tidal wave of tenant departures, with a vacancy rate approaching 25 to 30-plus percent.
Office space sat empty. Tenant pipelines evaporated. More subleases became available. Leasing timeframes stretched. Suddenly, the storyline pivoted from growth to dire uncertainty.
In cinematic terms, the protagonist suddenly faced adversity without a solution in sight.
“My name is Francis. Francis. Not Frank. Not Frankie. Francis.”
Oliver & Company, spoken by Francis
Beyond vacancy metrics, DTLA now faces a deeper challenge: identity. Historically defined by finance, law, government and creative users, the submarket’s tenant mix has fragmented. Hybrid work has weakened the allure of a centralized office presence.
Proximity to talent is now more important. Negative absorption of 4.6 million square feet since first-quarter 2020 means tenants have relocated from DTLA to nearby suburban office markets.
The question is no longer about leasing velocity. It’s about the role of the office itself.
“Why so serious?”
The Dark Knight, spoken by Joker
Nevertheless, DTLA retains undeniable strengths, including transit connectivity, character and affordability against coastal submarkets. Adaptive reuse buildings offer possibilities that cannot be replicated elsewhere in Los Angeles.
Leading the way is prominent DTLA landlord Jamison Properties, which recently secured $195 million in financing to convert the 620,000-square-foot office tower at 1055 W. 7th Street into residential apartments.
Like any compelling screenplay, conflict often precedes reinvention.
“You had me at hello.”
Jerry Maguire, spoken by Dorothy Boyd
The DTLA office market now finds itself searching for a sequel — one that blends innovation and renewed demand.
Will it be a tragedy? Or will it be an epic comeback story?
This is Los Angeles, after all, where reinvention is the heart of the industry.
— By George Crawford, First Vice President of Kidder Mathews. This article was originally published in the April 2026 issue of Western Real Estate Business.