Los Angeles County’s commercial real estate market is moving through one of the most consequential periods of structural realignment in a generation. Bargain-priced office towers are drawing in owner-users who see once-in-a-cycle acquisition opportunities.
The industrial sector, long the crown jewel of Southern California commercial real estate, is navigating a tariff-driven demand slowdown that is forcing landlords and investors to recalibrate. And the countdown to the twenty twenty-eight Olympic and Paralympic Games is already producing tangible leasing activity, with corporate headquarters and hospitality companies establishing their Los Angeles presence now rather than waiting.
This report covers the major transactions, leasing milestones, vacancy and absorption data, capital market signals, and forward-looking intelligence that every commercial real estate executive operating in Los Angeles County needs to understand heading into the second half of twenty twenty-six.
The Office Market: A Historic Shift in Who Owns the Buildings
Downtown Los Angeles office buildings have shed an extraordinary amount of value over the past four years, but that collapse in pricing is now producing one of the most consequential ownership shifts this market has seen in decades. Owner-users — meaning companies and institutions that physically occupy their buildings rather than leasing from a third-party landlord — now account for nearly half of all downtown office transactions, up sharply from historical norms, according to real estate data provider CoStar.
Institutional investors, who once dominated the buyer pool, have seen their share of downtown office purchases fall from forty-five percent to just twenty-six percent over the same period. The composition of the buyer pool has fundamentally changed, and that change tells a very clear story about where conviction is concentrating in this market.
The defining transaction of the quarter is Capital Group’s agreement to acquire the fifty-five-story Bank of America Plaza at three hundred thirty-three South Hope Street in Downtown Los Angeles for approximately two hundred ten million dollars. Capital Group is one of the world’s largest investment management firms and has been a Bunker Hill anchor tenant for decades.
The building was last appraised at six hundred five million dollars just ten years ago, meaning the firm is acquiring this asset at roughly thirty-five cents on the dollar relative to its peak valuation.
Capital Group Chief Executive Mike Gitlin explained the acquisition rationale with striking directness: “We knew the best landlord we could possibly have would be ourselves.” The firm plans to consolidate approximately twenty-one hundred employees into what it is calling a vertical campus, occupying the majority of the one-point-four-million-square-foot tower and redesigning it around collaboration, culture, and long-term talent retention.
Newmark broker Kevin Shannon provided critical context on the pricing: Capital Group paid approximately one hundred fifty dollars per square foot for a building that would cost as much as eight hundred dollars per square foot to construct at today’s replacement cost. Shannon added, “Everyone knows we are near the bottom of this cycle, and it is always good to buy near the bottom.” That sentiment is increasingly shared by a growing number of sophisticated occupiers and value-oriented investors who have begun moving off the sidelines.
Key Office Transactions: April 2026
The Pasadena submarket produced one of April’s most closely watched institutional office sales. On April twenty-fourth, Jones Lang LaSalle Capital Markets announced the completed sale of Thirty-Five North Lake Avenue, a one hundred fifty-eight thousand seven hundred eighty-five square foot Class A, Leadership in Energy and Environmental Design Gold certified office building. The seller was Swift Real Estate Partners. The buyer was the State Compensation Insurance Fund, a California public enterprise with a long track record of strategic real estate ownership, represented by CBRE.
Jones Lang LaSalle Managing Director Andrew Harper framed the deal in terms of long-term corporate strategy: “Owner-user acquisitions allow companies to control their real estate destiny while building long-term equity.” The Pasadena submarket remains one of the most fundamentally stable in the Greater Los Angeles area, benefiting from its proximity to the California Institute of Technology, a dense professional services ecosystem, and excellent transit connectivity.
On the public sector side, the Los Angeles Department of Water and Power is in active negotiations to purchase the thirty-five-story office building at eight hundred sixty-five South Figueroa Street from Manulife United States Real Estate Investment Trust for ninety-two-point-five million dollars.
The building carries an assessed value of two hundred forty-eight million dollars, making this transaction another illustration of how deeply downtown office values have compressed — and how aggressively public-sector owner-users are now pursuing that compression as a fiscal opportunity.
A third notable transaction involved the forty-one-story office tower at three hundred South Grand Avenue in Downtown Los Angeles, which sold for sixty-three million dollars, representing approximately forty-five dollars per square foot on a building assessed at far higher values just five years ago. These back-to-back deals confirm that owner-users across both the private and public sectors are executing against the same basic thesis: that the cost to own in downtown Los Angeles has rarely, if ever, been this compelling relative to the cost to lease or build.
Office Market Fundamentals: Q1 2026 Data
The underlying data confirms the office market has not yet recovered in traditional terms, but the directional signals are increasingly nuanced. CBRE reported that the Los Angeles office market recorded negative net absorption of four hundred three thousand six hundred fifty-five square feet in the first quarter of twenty twenty-six. Overall vacancy rose twenty basis points quarter over quarter to reach twenty-five-point-five percent, and overall availability climbed to thirty-point-five percent.
Average asking lease rates declined modestly to four dollars and thirteen cents per square foot per month on a full-service gross basis, continuing a gradual compression trend that began in twenty twenty-two. Only four hundred five thousand six hundred twenty square feet of office space remains under construction across the entire county, a figure that reflects the near-complete cessation of speculative development.
Cushman and Wakefield’s Q1 twenty twenty-six Marketbeat report aggregated slightly different numbers, citing an overall vacancy rate of twenty-three-point-six percent and negative net absorption of one-point-one million square feet for the quarter, including shadow space and large occupier consolidations. The firm noted that tenant-friendly conditions persist broadly across the market, with landlords offering significant concession packages to attract and retain credit tenants.
One genuinely encouraging signal emerged from the sublet data. Sublet availability dropped by six hundred eighty-one thousand two hundred sixty-six square feet during the first quarter of twenty twenty-six, reaching its lowest level since the year twenty twenty, according to Newmark. Declining sublet supply is typically an early-cycle indicator that the pain of workforce reductions and real estate right-sizing is working its way through the system — and that the tenant pool is beginning to tighten.
The quarter’s most significant new leasing event came in mid-April, when On Location — the global premium experiential hospitality and ticketing company responsible for managing official hospitality programs for the twenty twenty-eight Olympic and Paralympic Games — signed a one hundred eight thousand two hundred seventy-two square foot lease at four hundred forty-five South Figueroa Street in Downtown Los Angeles.
On Location will occupy six full floors and establish its Los Angeles global headquarters at the building. CBRE facilitated the lease on behalf of the landlord, Washington Capital. This transaction represents exactly the kind of Olympics-anchored corporate demand that Downtown Los Angeles stakeholders have been anticipating, and its timing confirms that the commercial activity cycle tied to the Games is already underway.
Industrial Market: Tariff Headwinds Slow Port-Adjacent Demand
The Los Angeles industrial market, which outperformed virtually every major market in the country for the better part of a decade, is now confronting a meaningful demand correction driven primarily by trade policy uncertainty. CBRE reported that while the market recorded nine hundred thirty-four thousand twenty-five square feet of positive net absorption in Q1 twenty twenty-six, overall vacancy climbed to five-point-four percent and availability reached eight-point-one percent — levels the market has not seen since before the pandemic-era industrial boom. Average asking rents declined to one dollar and twenty-one cents per square foot per month on a triple net basis.
Data from NAI Capital tells an even sharper story at the county level. Net absorption in Los Angeles County turned negative in the first quarter of twenty twenty-six at negative two-point-eight million square feet — a reversal from positive one-point-three million square feet recorded just twelve months earlier. The median industrial sales price registered two hundred ninety-seven dollars per square foot in Q1 twenty twenty-six, down three percent from three hundred six dollars per square foot in Q1 twenty twenty-five.
New supply is also decelerating. Only six hundred thirty thousand three hundred fifty-seven square feet of new industrial space delivered during the quarter, a forty percent decline from the same period one year ago, as developers pull back in response to weakening leasing demand and tighter financing conditions.
The central cause of this demand pullback is federal trade policy. Tariffs on Chinese goods now exceed one hundred forty-five percent, and the ports of Los Angeles and Long Beach together handle approximately one hundred thirty billion dollars in Chinese imports annually.
Importers and distribution operators cannot justify long-term lease commitments — often running five to ten years — under conditions where the landed cost of goods is subject to tariff levels that could change materially based on diplomatic negotiations. The result is widespread deal delay rather than deal cancellation, which means the demand pipeline is building rather than disappearing.
Several emerging demand sectors are partially offsetting the logistics slowdown. Aerospace and defense manufacturing, electric vehicle components, construction and fire rebuilding supply chains tied to the January twenty twenty-five wildfires, and last-mile distribution serving dense urban cores are all actively leasing industrial space across Los Angeles County. Executives with industrial holdings in submarkets serving these sectors are experiencing a notably different leasing environment than those concentrated in port-adjacent logistics corridors.
Retail, Mixed-Use, and Community Ownership
The retail investment market in Los Angeles County continues to evolve away from traditional single-tenant and anchor-driven formats toward adaptive mixed-use repositioning. Pacific Retail Capital Partners, in a joint venture partnership, completed the acquisition of a two-million-square-foot Los Angeles area mall with plans to transform the property into a mixed-use destination anchored by entertainment, food and beverage, residential, and experiential retail. ‘
This transaction reflects the continued institutional conviction that well-located large-format retail land represents some of the most valuable redevelopment basis available in the region.
On the community and small business side, Los Angeles County launched the second funding cycle of the Commercial Acquisition Fund in April twenty twenty-six, deploying two-point-six million dollars to advance community ownership and revitalize neighborhood commercial corridors.
The fund’s inaugural cycle deployed ten million dollars in American Rescue Plan Act funding and supported seven property acquisitions, creating space for thirty-nine small businesses, three nonprofit organizations, and more than one hundred twenty-five creative workspaces. The County’s Department of Economic Opportunity described the program as a long-term investment in the economic resilience of historically underserved commercial districts.
The Olympics Effect: Corporate Real Estate Decisions Are Happening Now
The twenty twenty-eight Olympic and Paralympic Games are no longer a distant planning horizon for Los Angeles commercial real estate — they are an active driver of leasing decisions in the present tense. The On Location headquarters lease at four hundred forty-five South Figueroa Street is the clearest current example of an Olympics-related corporate real estate commitment landing in downtown Los Angeles. But it will not be the last.
Hospitality, media, broadcast, logistics, and corporate sponsorship organizations with operational roles in the Games are in various stages of evaluating and committing to Los Angeles-area real estate right now. The window for securing premium space at favorable terms is narrowing as the Games approach. Executives with portfolios in Downtown Los Angeles, the Westside, the South Bay, and well-connected mid-city corridors should be evaluating their positioning in this context.
Separately, the Antelope Valley Commerce Center in the Palmdale area received a historic nine-point-four-million-square-foot entitlement approval in April, representing one of the largest industrial development authorizations in the Greater Los Angeles region’s recent history. While this project reflects longer-range supply planning, it signals continued institutional confidence in the greater Los Angeles region as a long-term logistics and manufacturing hub.
Multifamily: Institutional Buyers Return for Quality Product
The multifamily sector produced one of the most closely watched institutional transactions of the quarter in the first week of April. The Rise Hollywood, a three hundred sixty-nine-unit, award-winning apartment community located at thirteen thirty-one North Cahuenga Boulevard in Hollywood, sold for one hundred fifty-nine million dollars to AEW Capital Management.
The deal carries significance beyond its price tag because it represents a global institutional investment manager re-entering the Los Angeles multifamily market with conviction at a time when many domestic institutional buyers remain cautious.
AEW’s acquisition of The Rise Hollywood suggests that well-located, well-amenitized multifamily assets with strong occupancy in high-demand urban submarkets continue to attract long-horizon capital even in a challenging rate environment. The Hollywood submarket benefits from its proximity to the entertainment industry employment base, strong public transit access, and a demographically favorable renter population.
On the affordable and workforce housing side, BMO Bank provided construction financing for two hundred fifty-five new units of affordable housing designated for veterans in West Los Angeles, reinforcing the trend of institutional lenders continuing to support mission-driven multifamily product in the region.
Capital Markets and Financing Environment
The financing environment for Los Angeles commercial real estate in April twenty twenty-six reflects the broader national picture: debt capital is available but selective, and lenders are applying elevated scrutiny to office, retail, and construction loans while remaining competitive for industrial, multifamily, and necessity-based retail deals.
The Federal Reserve’s posture remains a central variable. Rate cut expectations have moderated from projections made at the start of twenty twenty-six, with persistent core inflation and strong employment data limiting the central bank’s flexibility. For commercial real estate buyers and borrowers, the practical effect is that the cost of debt has not improved meaningfully since late twenty twenty-five, which continues to constrain transaction volume and limit cap rate compression across most asset classes.
Despite these headwinds, the return of owner-users as a dominant buyer cohort in the office market is partially decoupling office transaction volume from the traditional debt-driven capital markets cycle, since many of these buyers are financing with a combination of equity and corporate balance sheet resources rather than pure commercial mortgage debt.
What the Data Suggests
The April twenty twenty-six numbers, read together, tell a coherent and actionable story.
The office market has very likely bottomed in Downtown Los Angeles. Owner-users buying at one hundred fifty dollars per square foot against replacement costs of eight hundred dollars per square foot, public agencies acquiring towers at sixty-cents-on-the-dollar relative to assessed values, and sublet availability hitting its lowest point since twenty twenty are not signals of a market in freefall.
They are signals of a market working through the final stages of price discovery. Executives who are currently leasing space and have long time horizons should be stress-testing the buy-versus-lease equation with current acquisition pricing in mind.
The industrial market is in a structural pause, not a structural decline. The negative absorption figures are real, but they reflect decision paralysis driven by tariff uncertainty rather than a fundamental loss of demand for Los Angeles County logistics and manufacturing space.
When trade policy stabilizes — whether through negotiated agreements, tariff reductions, or simply the passing of time — the pent-up leasing demand that has been accumulating since late twenty twenty-five will begin to release. Owners of well-located industrial product should be prioritizing tenant retention and rolling short-term leases into longer commitments before that release occurs and market leverage shifts back toward landlords.
The Olympics represent a structured, time-certain demand catalyst that is underpriced in most investment theses right now. The On Location lease is the visible tip of a much larger iceberg of corporate real estate decisions that will be made in the next eighteen to twenty-four months. Investors who move early will have more choices and better pricing. Those who wait for the demand wave to be obvious will be competing in a crowded market.
Closing Remarks
Los Angeles County’s commercial real estate market in April twenty twenty-six is a market built for those who read data rather than headlines. The headlines say office is broken. The data says capital is moving decisively. The headlines say industrial is cooling. The data says demand is delaying, not disappearing.
The headlines say the Olympics are two years away. The data says the deals tied to the Games are being signed right now.
The executives who will define the next cycle in this market are the ones already making decisions with that clarity. As Kevin Shannon of Newmark said simply and plainly: “It is always good to buy near the bottom.”
The data suggests the bottom is here.
The question for every owner, investor, and operator reading this report is the same: what are you going to do about it!
References
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CBRE, Los Angeles Office Figures Q1 2026: https://www.cbre.com/insights/figures/los-angeles-office-figures-q1-2026
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CBRE, Los Angeles Industrial Figures Q1 2026: https://www.cbre.com/insights/figures/los-angeles-industrial-figures-q1-2026
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Cushman and Wakefield, Los Angeles Office Marketbeat Q1 2026: https://assets.cushmanwakefield.com
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Newmark, Los Angeles Market Reports Q1 2026: https://www.nmrk.com/insights/market-report/los-angeles-market-reports
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NAI Capital, Los Angeles County Industrial Market Gains Momentum, April 23, 2026: https://www2.naicapital.com/deals-are-getting-done-la-county-industrial-market-gains-momentum
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Los Angeles Times, Downtown L.A.’s Cratering Real Estate Market Is Changing, April 3, 2026: https://www.latimes.com/business/story/2026-04-03/companies-are-buying-their-buildings-instead-of-renting-them-as-office-values-bottom-out-around-los-angeles
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Los Angeles Times, On Location Lease at 445 South Figueroa Street, April 15, 2026: https://www.latimes.com/b2b/commercial-real-estate/story/2026-04-15/on-location-la-445-s-figueroa-street-lease
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Jones Lang LaSalle, Sale of 35 North Lake Avenue Pasadena, April 24, 2026: https://www.jll.com/en-us/newsroom/jll-facilitates-the-sale-of-class-a-office-tower-in-pasadena
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Los Angeles County Department of Economic Opportunity, Commercial Acquisition Fund Second Cycle, April 2, 2026: https://lacounty.gov/2026/04/02/los-angeles-county-launches-second-cycle-of-commercial-acquisition-fund
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Los Angeles Times, Tariffs Chill Southern California’s Industrial Property Market: https://www.latimes.com/business/story/2025-04-10/tariffs-chill-southern-californias-vast-industrial-property-market-ports-los-angeles-long-beach
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Los Angeles Times, Tariffs Pose Trouble for Southern California Trade Sector: https://www.latimes.com/business/story/2025-04-22/tariffs-impact-trade-industry-southern-california
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Los Angeles Business Journal, 2026 Commercial Real Estate Awards, The Rise Hollywood Sale: https://labusinessjournal.com/business-journal-events/2026-commercial-real-estate-awards-best-multi-family-sale-of-the-year
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JLL, Los Angeles Industrial Market Dynamics Q1 2026: https://www.jll.com/en-us/insights/market-dynamics/los-angeles-industrial
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Seyfarth Shaw, Real Estate Market Pulse April 2026: https://www.seyfarth.com/news-insights/real-estate-market-pulse-april-2026.html