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Greater Los Angeles Office Figures Q3 2022

October 19, 2022

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Overview

‒Uncertainty about the future of workplace needs continued to be a key driver for most tenants. GLA experienced -1.19M sq. ft. of negative absorption in the third quarter of 2022, as several occupiers engaged in strategic downsizing and relocation to higher quality markets and spaces. 

‒Traditional office occupiers such as legal and accounting firms accounted for the majority of leases signed, followed by media and tech occupiers in Q3. Additionally, several tech, media, and entertainment companies leased space this quarter, emphasizing the prevalence of entertainment and technology in Los Angeles and West LA.

‒Total sublease space increased significantly in Q3 to 9.97M sq. Ft. of office space. In the third quarter, an additional 955,000 sq. ft. of sublease availability was added. West LA remains the most active sublease market, accounting for 3.52M sq. ft. or 35% of the GLA available sublease total.

‒After three consecutive quarters of positive net absorption, Greater Los Angeles experienced it’s first quarter of negative absorption due to economic turbulence. Occupiers remain uncertain about the future of their workplace needs, which in turn, has caused them to sublease, downsize, or even vacate their current locations entirely, opting for remote or flexible work. Asking lease rates for Class A buildings have increased by $.02 since Q2 which shows there is still a demand for higher quality space as several tenants pursue a downsize to quality.