LA Retail Vacancy Edges Up to 5.7% in Q3 2026

What's happening

The Los Angeles retail vacancy rate was 5.7% in 3Q 2026, up 10 basis points from 5.6% in both the prior quarter and 3Q 2025, according to Kidder Mathews. Net absorption was negative 164,608 SF for the quarter.

Year-to-date net absorption stood at -173,708 SF, an improvement over the -1,132,087 SF recorded through the same period in 2025. Average asking rents were $2.75/SF/month, down 2.54% from $2.82 a year earlier.

• Vacancy rate: 5.7%, up from 5.6% in 2Q 2026
• Asking rent: $2.75/SF/month, down from $2.76 last quarter
• Under construction: 697,446 SF, down 4.26% year over year
• Q3 deliveries: 39,413 SF
• Average cap rate: 6.0%, up 20 bps from 5.8% in 3Q 2025

What it means for owners, tenants and investors

For owners, vacancy is drifting higher while asking rents soften slightly, which points to more competition for tenants in weaker centers. For tenants, that combination can mean more room to negotiate on renewals and new leases.

For investors, cap rates moved higher and average pricing per square foot fell, so entry pricing is lower than a year ago. A thin construction pipeline limits new competing supply.

Vacancy is creeping up, but limited new supply and a much better year-to-date absorption trend keep the market steady.

What to watch

Watch whether quarterly absorption turns positive again and whether the pipeline, including Shops at Hollywood Park in Inglewood/South LA, leases up as it delivers.