Market Reports

— By Caleb Hodge of KWP Real Estate —  The Los Angeles office market is undergoing a transformation. Finally. Downtown LA and most of the submarkets were decimated following the pandemic, but leasing activity is increasing. In fact, the fourth quarter of last year saw the highest annual leasing activity since the pandemic was officially declared “over,” according to Savills Research and Data Services. How is this possible? The answer lies in the evolving identity of office spaces, which is driven by the demand for creative office.  Despite increased asking rates in certain submarkets, Los Angeles is still a tenant-driven office market. The rub is that hybrid-working models continue to, at times, complicate leasing decisions. Fortunately, highly sought-out creative office space in Los Angeles offers two key incentives: premium amenities and functional, innovative office designs. Creative office space may still be considered niche, but the amenities and design layouts are critical when bringing employees back to the office. In fact, those attributes are highly desired by most modern office workers, whether their industry or physical space is considered “creative” or not.  With traffic being a constant factor in LA, centrally located offices with easy commutes for a majority of workers …

— By Sebastian Bernt and Erick Parulan of Avison Young — The Orange County office market continues to show resilience, particularly compared to urban centers like Downtown Los Angeles. Its suburban environment, coupled with higher office utilization rates, has made it an attractive option for businesses adapting to evolving workplace strategies. As a result, leasing activity has remained steady with availability stabilizing and tenant demand holding firm. Total leasing volume reached 1.6 million square feet in the fourth quarter of 2024, bringing the annual total to 7.8 million square feet. Notable transactions included Willow Laboratories, which signed a 63,440-square-foot lease at 121 Theory Drive in Irvine, and Acrisure, which secured 59,409 square feet at 611 Anton Blvd in Costa Mesa. While leasing slowed slightly in the fourth quarter, demand for modern, amenity-rich office spaces remained strong as companies continued implementing return-to-office strategies. This demand has pushed average asking lease rates to $35.05 per square foot, reflecting a broader shift toward high-quality, collaborative work environments that prioritize employee engagement and workplace experience. Orange County’s growing residential appeal has further fueled office demand as young professionals and families increasingly opt for a suburban lifestyle. As a result, companies are prioritizing locations with …