Last updated 5 August 2026 with Q2 2026 market data. We refresh this page each quarter as new brokerage research is published.
The short answer: what commercial space costs in Los Angeles right now
Los Angeles quotes commercial rent in dollars per square foot per month, not per year like most U.S. markets. Office is normally quoted full-service gross; industrial and retail are quoted triple net (NNN). As of Q2 2026:
| Property type | Average asking rent | Vacancy | Direction |
|---|---|---|---|
| Office (LA County) | $4.19 /SF/mo full service | 25.8% overall | Rent +1.1% YoY; vacancy still rising |
| Industrial (LA County) | $1.37 /SF/mo NNN | 5.0% | Rent −7.0% YoY, −32.4% over 3 years |
| Retail (LA County) | $2.76 /SF/mo | 5.6% | Roughly flat; vacancy at a 10-year high |
The headline story of 2026 is that office and industrial are moving in opposite directions from where most people assume. Office rents are technically stable while a quarter of the market sits empty, propped up by landlords who would rather hold face rates and give concessions. Industrial, the sector everyone called bulletproof, has given back roughly a third of its peak rent over three years.
Why you will see two different LA office vacancy numbers
If you compare research reports you will find LA office vacancy quoted anywhere from 16% to 27%. Both are correct; they measure different things.
If you are pricing space to lease rather than to let, our LA commercial leasing guide converts any proposal to one comparable effective rate, and the buying guide covers cap rates, the Proposition 13 reset and Measure ULA.
- CBRE, Savills and Cushman & Wakefield report 23–27%. They track roughly 285 million SF of competitive inventory and include sublease and shadow space. CBRE put overall vacancy at 25.8% in Q2 2026, up 1.5 points in the quarter. Savills put availability at 26.6%.
- Kidder Mathews reports 16–18%. It measures direct vacancy across a narrower inventory set, 16.4% direct, 17.8% total in Q2 2026.
When an LA broker quotes a vacancy figure in conversation, they almost always mean the CBRE-basis number. We use it here. What matters for a negotiation is not the headline percentage but the vacancy in your specific submarket and building class, which varies enormously: from 5.6% in Southeast LA to 58.4% in East Downtown.
Office rents and vacancy by Los Angeles submarket
| Submarket | Asking rent ($/SF/mo, FS) | Vacancy | Notes |
|---|---|---|---|
| Century City | $7.67 | ~23% (Westside) | Highest rents in LA; flat YoY |
| Beverly Hills | $6.71 | n/a | +4.7% YoY, strongest rent growth in the county |
| West LA | $5.05 | 18.2% direct | 38.4% of all regional leasing activity |
| Burbank | $4.27 | 21.3% | Media and production |
| Tri-Cities composite | $3.80 | 17.2% direct | Pasadena / Burbank / Glendale |
| Pasadena | $3.57 | 13.8% | Tightest of the Tri-Cities |
| Glendale | $3.21 | 17.2% | n/a |
| Downtown LA | $2.97 | 35.3% | Highest vacancy of any major submarket |
| East Downtown | n/a | 58.4% | Effectively a distressed submarket |
| Hollywood / Wilshire Corridor | n/a | 28% | −87,000 SF absorption in Q2 |
| Southeast LA / Mid-Cities | n/a | 5.6% / 6.2% | Tightest office submarkets in the county |
Countywide net absorption was −432,000 SF in Q2 2026 and −3.0 million SF over the trailing twelve months (CBRE). The one genuinely encouraging figure is sublease space: 6.7 million SF available, down from 7.4 million a year ago and well off the 11 million SF peak in 2024 (Savills). Sublease inventory clearing is normally the first sign of a floor.
The table above covers the major submarkets. For the complete data set — all 31 office and 49 industrial LA submarkets with inventory, direct and total vacancy, net absorption and asking rents, sortable and searchable — see every Los Angeles commercial submarket.
What this means if you are leasing office space
A 25% vacancy market is a tenant market, but not uniformly. In Century City and Beverly Hills, where rents are flat-to-rising and quality space is scarce, you have limited leverage. In Downtown LA at 35% vacancy you have a great deal, and the negotiation should focus on concessions rather than face rent, because landlords with lender covenants often cannot drop the headline number.
Concessions are where the real money is. CBRE’s most recent concessions dataset (FY2024, published March 2025) put the average office tenant improvement allowance at $87.51/SF with 8.9 months of free rent, down about 10% from the 2023 peak but still roughly 30% above pre-pandemic norms.
Here is the number that actually decides whether a deal works: office fit-out in Los Angeles now costs $188/SF, up about $26/SF year over year, one of the largest increases in the country (Cushman & Wakefield, Office Fit Out Cost Guide: Americas 2026). Against a national average allowance of roughly $88/SF, a tenant faces real out-of-pocket exposure on a full build-out. Negotiate the allowance against a costed plan, not against a benchmark.
Industrial rents and vacancy: the correction nobody predicted
LA industrial asking rents have fallen 7.0% year over year and 32.4% over the past 36 months (CBRE, Q2 2026). That three-year figure is the single most important number in this guide. Rents have retraced roughly a third from the 2022–23 peak, and any pricing decision anchored to a 2022 comp is badly wrong.
| Market | Asking rent ($/SF/mo, NNN) | Vacancy |
|---|---|---|
| South Bay | $1.47 | 6.9% direct |
| Orange County | $1.45 | 6.0% direct |
| LA County overall | $1.37 | 5.0% (CBRE) / 6.0% direct (Kidder) |
| Central LA | $1.34 | 3.7% |
| Mid-Counties | $1.22 | 7.5% |
| Inland Empire | $0.98 | 7.6% direct / 8.6% total |
The spread between South Bay at $1.47 and the Inland Empire at $0.98 is the whole Southern California industrial decision in one line: a 33% rent discount in exchange for roughly 60 miles of drayage. For port-dependent users that trade rarely pencils. For regional distribution it increasingly does.
Demand fundamentals are holding up better than pricing. Port of Los Angeles volume in the first half of 2026 was 5,122,602 TEU, up 3.37% year over year, with June setting a record for the month at 1,002,734 TEU. Combined LA and Long Beach Q2 volume was up 10.9% year over year. What changed is supply: the Inland Empire alone delivered 1.2 million SF in Q2 with a 6.2 million SF construction pipeline (CBRE).
Retail rents, vacancy and the prime corridors
LA retail vacancy reached 5.6%–5.8% in Q2 2026, the highest in more than a decade, even as net absorption stayed positive at roughly +410,000 SF. Average asking rent is $2.76/SF/month per Kidder Mathews, or $3.08/SF/month ($36.90/year) per CoStar, a 12% gap driven largely by lease-structure definitions.
| Retail submarket | Asking rent ($/SF/yr) | Vacancy | Cap rate | Price/SF |
|---|---|---|---|---|
| Tri-Cities | $40.26 | 4.6% | 5.9% | $425 |
| Central | $39.98 | 6.3% | 5.9% | $342 |
| San Fernando Valley | $36.02 | 5.9% | 5.6% | $408 |
| South Bay | $33.94 | 6.5% | 6.1% | $410 |
Prime corridors operate in a different universe. Rodeo Drive asking rents now run $1,000 to nearly $1,400 per square foot per year, up more than 50% since 2019 (CBRE, March 2026). Beverly Hills citywide retail vacancy is 7.4%, but JLL describes vacancy on Rodeo, Cannon and Beverly Drive as functionally zero. Recent trades include the Hermès building at $400 million for 25,000 SF.
Los Angeles cap rates
| Property type | Cap rate | Source |
|---|---|---|
| Retail | 5.96% average (5.6%–6.1% by submarket) | CoStar via Matthews, Q2 2026 |
| Industrial | 5.8% average (mid-5% to 6% range) | CoStar via Matthews, Q2 2026 |
| Multifamily | 5.8% average, up 30 bps YoY | Kidder Mathews, Q2 2026 |
| Office | No reliable published figure, see below | n/a |
We are not going to publish an LA office cap rate, and you should be sceptical of anyone who does right now. The canonical source is the CBRE US Cap Rate Survey; its most recent edition covers H2 2025 and was published in February 2026, with LA breakouts behind a gated download. No H1 2026 edition has been released. Several websites currently quote an LA Class A office cap rate of 4.0–5.5% attributed to CBRE and Cushman & Wakefield, we could not verify that figure in any primary document from either firm, and it is difficult to reconcile with a 25%-vacancy market. Office trades in LA are currently thin and idiosyncratic enough that a blended cap rate would mislead more than it informs. If you need one for a specific asset, it has to come from comparable trades in that submarket and class.
The 2026 structural shift: citywide adaptive reuse
In February 2026 Los Angeles enacted a citywide adaptive reuse ordinance, the most consequential change to LA commercial property economics in years. Conversion rights previously limited to Downtown, Chinatown, Hollywood and Koreatown now extend to all commercial buildings citywide, with by-right approval for compliant projects and the minimum building age cut from pre-1975 construction to 15 years.
The driver is roughly 50 million SF of vacant office space. The current pipeline stands at 5,640 adaptive reuse apartments citywide, of which 2,843 are office-to-residential conversions: second only to Manhattan nationally.
For an office owner this changes the valuation question. A building that appraises poorly as office may appraise very differently as a conversion candidate, and the variables that matter (floor plate depth, window line, column spacing, plumbing risers, parking ratio) are not the ones that drive office value. If you own vacant or heavily vacant office space in Los Angeles, a conversion feasibility study is now a reasonable first step rather than a last resort.
How to price your property competitively in this market
Pricing competitively does not mean pricing low. It means matching your asking rate to what a credible tenant will actually sign, then structuring the deal so the economics work for both sides.
Our full LA market guide uses the Kidder Mathews basis and reports direct office vacancy of 16.4% at $3.50 PSF full-service — the same market, measured differently. See the Los Angeles commercial real estate market guide for that view, and for Measure ULA, cap rates and the quarterly data set.
Price aggressively when
- Your building sits in a high-vacancy submarket, Downtown LA, East Downtown, Hollywood
- You need lease-up for debt service or a refinance covenant
- The asset is Class B or C and competing against renovated Class A at a narrow spread
- Your industrial asset was last leased in 2022 or 2023, the market has moved 32% since then
Hold your rate and negotiate on terms when
- You are in Century City, Beverly Hills, West LA, or a sub-6% industrial submarket
- Lender covenants make a face-rate reduction more damaging than a concession package
- The tenant credit is strong enough that term length is worth more to you than rate
That second point deserves emphasis, because it is the most common expensive mistake we see. A landlord who cuts face rent by 10% has permanently reset the comp for their building and every appraisal that follows. A landlord who holds face rent and gives an extra four months free and a higher improvement allowance delivers the same first-year economics to the tenant, keeps the comp intact, and preserves valuation. In a market where cap rates sit near 6%, every $10,000 of annual income you give up costs roughly $167,000 of asset value.
Frequently asked questions
What does commercial property cost in Los Angeles?
As of Q2 2026, average asking rents in Los Angeles County are $4.19 per square foot per month for office (full service), $1.37 per square foot per month for industrial (NNN), and $2.76 per square foot per month for retail. Prime corridors are far higher, Century City office asks $7.67/SF/month and Rodeo Drive retail runs $1,000 to $1,400 per square foot per year. Los Angeles quotes rent monthly, unlike most U.S. markets which quote annually.
What are cap rates in Los Angeles right now?
Q2 2026 transaction data puts LA retail at approximately 5.96%, industrial at approximately 5.8%, and multifamily at approximately 5.8%. There is no reliable published LA office cap rate at present, the CBRE US Cap Rate Survey has not released an H1 2026 edition, and office transaction volume is too thin for a meaningful blended figure. Treat any quoted LA office cap rate as an estimate requiring verification against actual comparable sales.
What is the average retail space rent in Los Angeles?
Average LA retail asking rent is $2.76 per square foot per month (Kidder Mathews) or $3.08 per square foot per month, equivalent to $36.90 per square foot per year (CoStar), for Q2 2026. By submarket, Tri-Cities is highest at $40.26/SF/year and South Bay lowest at $33.94/SF/year. Retail vacancy is 5.6%–5.8%, the highest in over a decade.
Why have Los Angeles industrial rents fallen so much?
LA industrial asking rents are down 7.0% year over year and 32.4% over three years. The cause is supply catching up with demand, not demand collapsing: port volumes are actually up 3.37% year over year through the first half of 2026. A large construction pipeline delivered into the market after the 2022 peak, and the Inland Empire still has 6.2 million SF under construction. If your last industrial comp is from 2022, it no longer reflects the market.
How often should commercial pricing be reviewed?
Every 90 days, and immediately after any comparable lease closes in your submarket. In a market moving as fast as LA industrial, where rents fell 7% in twelve months, a six-month-old asking rate is a stale asking rate, and stale pricing extends marketing time far more than it protects value.
Should I lower my asking rent or increase concessions?
In most cases, increase concessions. Cutting face rent permanently resets the comparable for your building and affects every subsequent appraisal and refinance. Free rent and a larger tenant improvement allowance deliver equivalent first-year economics to the tenant while preserving your face rate and reported value. The exception is a genuinely overpriced asset where the face rate is deterring tours altogether, concessions cannot fix a rate nobody will inspect.
What does an office tenant improvement allowance cover in Los Angeles?
The most recent national benchmark is $87.51 per square foot (CBRE, FY2024 data). Los Angeles office fit-out cost is currently $188 per square foot (Cushman & Wakefield, 2026). The gap between the allowance and the actual construction cost is the tenant out-of-pocket exposure, and it has widened as LA fit-out costs rose roughly 15% year over year. Negotiate the allowance against a costed build-out plan rather than a market benchmark.
Get pricing on your specific property
Market averages are a starting point, not a valuation. Rent, vacancy and cap rates in Los Angeles vary more by submarket and building class than by property type: a Class A Century City office at $7.67/SF and a Downtown Class B at $2.97/SF are the same LA office market only on paper.
KEYZ Commercial provides pricing analysis, lease and sale comparables, and cap rate valuation across Southern California. Browse current listings or contact our team for an analysis of your property.
hello@keyz.com | 888.539.9101
Sources
- CBRE, Los Angeles Office Figures Q2 2026 and Los Angeles Industrial Figures Q2 2026, July 2026
- CBRE, Inland Empire Industrial Figures Q2 2026, July 2026
- Kidder Mathews, Q2 2026 market reports: Los Angeles Office, Industrial, Retail, Multifamily; Orange County Industrial; Inland Empire Industrial
- Savills, Greater Los Angeles office data, Q2 2026, via Commercial Observer, 1 July 2026
- CoStar data via Matthews, Los Angeles Retail Market Report Q2 2026 and Los Angeles Industrial Market Report Q2 2026
- Cushman & Wakefield, Office Fit Out Cost Guide: Americas 2026, March 2026
- CBRE, Office Building Owners Offering Fewer Concessions to Tenants, 6 March 2025
- Port of Los Angeles, 2026 container statistics
- The Real Deal, LA enacts commercial-to-housing conversion law, 13 February 2026