Los Angeles County office leasing hits highest since 2019 on renewals

Los Angeles County office tenants signed roughly 4 million square feet of leases in the third quarter, the highest quarterly total since 2019 and up 15 percent from a year earlier, according to Savills. The gain over the second quarter was just 0.7 percent, yet availability fell 110 basis points to 26.5 percent, 170 basis points below a year ago, as sublease space dropped from 8.7 million to 6.3 million square feet for its eighth straight quarterly decline.

Renewals did the heavy lifting: six of the ten largest deals were tenants recommitting to space they already held, led by Raytheon's 144,709-square-foot renewal in El Segundo and Pepperdine University's 117,495 square feet near Marina del Rey and Playa Vista. The two relocations on that list never left the county, with PwC taking 138,000 square feet in Century City and Innocean USA taking 101,000 square feet in El Segundo, shuffling occupancy rather than adding to it. That mix leaves headline volume doing less for asking rents than expansion demand would.

The gains remained narrow, concentrated in Century City, Beverly Hills and El Segundo, while Miracle Mile carries the county's highest availability at 39.2 percent, ahead of Burbank at 37.1 percent and Culver City at 37 percent.

Asking rents slipped 0.2 percent from the second quarter to sit 0.6 percent above last year, with Class A rents up 0.8 percent annually, while Century City and Beverly Hills remain the county's most expensive submarkets at $7.61 and $6.71 per square foot per month. Savills expects landlords in premier submarkets to hold pricing power as trophy space tightens, with concessions staying near historic highs—the occupancy recovery has not reached the rent roll.

Savills' Miami-Dade read this month, where rents rose 8.4 percent while leasing slipped to 1.1 million square feet, leaves Los Angeles getting volume without the price. For lenders working through office debt, Colliers is marketing the EY Plaza loan downtown into an owner-user bid, and leasing at a 2019 high is the backdrop against which that note prices.

Volume at a 2019 high does not refute the trophy-office markdown at the center of the refinancing wall, but it complicates the timing: premier submarkets are filling while several parts of the county still sit above 30 percent availability. The number to watch next quarter is whether Century City's $7.61 asking rent moves, or whether concessions keep absorbing the demand.