LA office vacancy reaches 25.8% in Q2 2026

What's happening

Los Angeles office vacancy climbed to 25.8% in Q2 2026, according to Bisnow's review of quarterly data, with net absorption of negative 432,000 sq. ft. for the quarter and about negative 3 million sq. ft. over 12 months. Downtown vacancy stood at 35.3%.

Leasing volume was 4.5 million sq. ft., down from Q1 but up from 3.8 million sq. ft. in Q2 2025. West LA accounted for 38.4% of regional leasing, led by PwC's 138,000 sq. ft. lease at 2121 Avenue of the Stars in Century City. Hollywood and the Wilshire Corridor had about 28% vacancy, and the South Bay posted the largest negative absorption of any submarket at negative 165,000 sq. ft. CBRE's Jeff Pion noted that LA's creative industries are slower to return to offices than the financial services and legal firms driving Westside demand.

• Vacancy: 25.8% countywide; Downtown 35.3%; Century City/Westside about 23%
• Absorption: -432K SF in Q2; about -3M SF over 12 months
• Leasing: 4.5M SF in Q2, versus 3.8M SF a year earlier
• Notable lease: PwC, 138K SF in Century City (the quarter's second-largest)

What it means for owners, tenants and investors

The LA office market is splitting in two. Finance and legal tenants are committing to top-tier Westside buildings, while entertainment, streaming and tech users continue to return more slowly, leaving Hollywood and Downtown with high vacancy.

Tenants outside prime Century City towers have strong negotiating leverage on rent, free rent and improvements. Investors are finding pricing at deep discounts to replacement cost, and conversion or repositioning remains the main thesis for older buildings. Owners of commodity buildings face the most pressure, since tenants can trade up at modest cost. Well-capitalized owners who can fund improvements and commissions are best positioned to win the tenants who are moving. Lenders and special servicers will likely continue to bring distressed office assets to market, which creates opportunity for buyers with patient capital.

What to watch

Studio and streaming hiring trends, and whether the Westside leasing concentration spreads to Santa Monica and Playa Vista. A second straight quarter of leasing above 4 million sq. ft. would support the view that demand is improving even while vacancy stays high.

Photo: Lisha Riabinina / Unsplash.