Southern California finished 2023 with enough empty office space to fill a landmark Los Angeles office tower 58 times.
The five-county region had 81 million vacant offices out of 398 million square feet of supply – a 20% vacancy rate, according to my trusty spreadsheet’s tally of year-end office leasing stats from Cushman & Wakefield. Those vacancies would fill 58 US Bank Towers, the 72-story Downtown LA landmark with 1.4 million square feet of office space.
Now, local office landlords did manage to rent 20 million square feet of space to new tenants last year. But that was 7 million short of what was added to the market by companies abandoning offices. The work-from-home trend remains a key part of the job market, thanks to the economy-altering powers of coronavirus.
Ponder that at the end of 2019, just before the pandemic struck, Southern California had 41 million square feet of empty offices and a 13% vacancy rate.
Local buzz
Here’s what Cushman & Wakefield had to say about local metros as of year-end 2023 …
Los Angeles: 51 million square feet vacant or 24%. “The wide acceptance of hybrid and remote work led to far less space being utilized by occupiers, and economic shifts forced many big companies to rethink not only the size of their workforces but where in the market they should be located.”
Orange County: 18 million square feet vacant or 19.6%. “Continues to face uncertainty nearly four years after the onset of the pandemic. The overall vacancy rate has increased significantly, signifying that many are still not fully committed to back in the office.
San Diego: 10 million square feet vacant or 14.5%. “There are currently 15 office projects that are 100% vacant and provide the potential for opportunities to transform obsolete buildings into hotels, residential or other alternative uses.”
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Inland Empire: 2 million square feet vacant or 9.5%. “Has upheld robust market fundamentals by catering to its primarily local population. Consequently, remote work and hybrid schedules have had minimal influence compared to neighboring markets.”
By the slice
Ponder 19 slices of the region, ranked by vacant office space, as carved up by analysts at Cushman & Wakefield …
West Los Angeles: 14.9 million square feet empty out of 58 million – or 26% vacancy (fourth-highest rate in the region).
John Wayne Airport area: 8.1 million square feet of 40 million – or 20% (No. 9).
LA south: 7.4 million square feet of 32 million – or 23% (No. 5).
Downtown central LA: 7.3 million square feet of 28 million – or 26% (No. 3).
LA north: 6.3 million square feet of 31 million – or 21% (No. 7).
LA tri-cities: 5.7 million square feet of 26 million – or 22% (No. 6).
Central San Diego: 5.3 million square feet of 42 million – or 12% (No. 15).
South Orange County: 4.4 million square feet of 22 million – or 20% (No. 10).
Downtown non-central LA: 4.2 million square feet of 13 million – or 33% (No. 1).
Mid-Wilshire: 3.8 million square feet of 13 million – or 30% (No. 2).
Central Orange County: 3.8 million square feet of 19 million – or 20% (No. 11).
South San Diego: 3.6 million square feet of 18 million – or 20% (No. 8).
North San Diego: 1.5 million square feet of 12 million – or 13% (No. 14).
San Gabriel Valley: 1.2 million square feet of 12 million – or 10% (No. 18).
West Orange County: 910,000 square feet of 4.8 million – or 19% (No. 12).
North Orange County: 890,000 square feet of 5.7 million – or 16% (No. 13).
Inland Empire East: 810,000 square feet of 9.2 million – or 9% (No. 19).
Inland Empire West: 790,000 square feet of 8.1 million – or 10% (No. 17).
Inland Empire South: 400,000 square feet of 3.9 million – or 10% (No. 16).
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
Source: Orange County Register
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