• Vacancy has leveled over the last six quarters, reflecting ongoing efforts by occupiers to optimize space, which supported a more stable market environment. • Larger occupiers have focused on renewals, complemented by selective new leasing from a diversified set of tenants, indicating a mix of retention and incremental demand. • Owner-user acquisitions were a notable investment theme, as some occupiers pursued more control over their premises, while new construction remained limited, influencing future space options. • Although headwinds persist in the media sector, the broader Los Angeles economy is highly diversified, which will support a balanced leasing market. Los Angeles (Downtown) Office Market Trends Although additional Q4 space givebacks contributed to a slight increase in vacancy to 32.7%, overall occupancy has remained stable over the last six months. Sublease levels are falling, with sublease availability declining by 100,000 s.f. over the course of the year, but the pace of removals was slower in the CBD. Major consolidation within the media and entertainment sector is expected to drive headcount reductions in 2026, which may create new headwinds for the market as it continues to navigate its recovery. Rents declined slightly in 2025, in contrast to the broader market which grew by a modest 1.4% over the last 12 months. In more sought-after submarkets such as Century City, where flight-to-quality drove more demand, rents grew by as much as 7.3% in 2025. Century City continues to capture relocation-oriented leasing activity from the CBD, but the pace is slowing as new development in Westside submarkets becomes scarce. While the CBD continues to lag the broader LA metro, Class A buildings in the CBD are beginning to stabilize more quickly. The Class A market saw only a marginal -75,000 s.f. of negative net absorption in 2025, and newer Class A buildings developed since 2000 saw positive net absorption and declining vacancy rates. Outside of the CBD, less than 600,000 s.f. of stock is currently available in newer Trophy buildings, which may tilt more demand back to the CBD as options continue to dwindle. Outlook Downtown Los Angeles saw considerable steps towards recovery in 2025, but headwinds remain. Large transactions and user purchases were more frequent in 2025, but consolidation in the media and entertainment landscape is expected to drive space cuts among major media corporations in 2026. High-end professional services firms still demonstrate a clear preference for newer-vintage assets in Century City and other Westside markets. DTLA has just 95,000 s.f. available in any asset built since 2010, making options for high-end occupiers extremely limited. Progress towards improved public safety in downtown and momentum for office-to-residential conversions will drive continued stabilization in 2026, but organic demand growth may continue to favor other peripheral urban submarkets. MUST's Submarkets Overall Market Statistics Forecast 2025 net absorption (s.f.) -891,493 Under construction (s.f.) 1,313,879 Total vacancy (%) 28.7% Sublease vacancy (s.f.) 7,259,265 Asking rent (US$ p.s.f.) US$48.13 Concessions Stable Net Absorption and Overall Vacancy Rates Gross Leasing Activity Rental Rates and Going-in Yields CBD Class A cap rate (%) Cap rate Asking rent 0.5 0.0 -0.5 -1.0 -1.5 8% 7% 6% 5% 4% 3% 35% 30% 25% 20% 15% 10% $50 $45 $40 $35 $30 $25 2010 2014 2018 2012 2016 2020 2022 2024 Downtown LA Rest of Market 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10.8M 7.8M 10.3M 11.9M 6.3M 7.6M 7.2M 7.3M 9.1M 9.5M 2.2M 2.3M 8.1M 2.1M 1.4M 1.3M 1.9M 1.5M 1.7M 1.8M 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net absorption (m.s.f.) Total vacancy (%) INDEPENDENT MARKET REPORT By JLL as at 31 December 2025 / 40 / EXPANDING HORIZONS
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