Los Angeles Commercial Office Space for Rent

Q3 2026

Q3 2026 Los Angeles Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Los Angeles commercial real estate stayed mixed in Q3 2026. Office vacancy edged down and absorption turned positive for the quarter, industrial softened as leasing slowed, and retail held steady at 5.7% vacancy. Tenant demand on TenantBase moved firmly toward office: office space accounted for 58.6% of all Los Angeles tenant searches in Q3, up from 28.6% in Q2, and the space short-term office tenants need nearly tripled.

Sector Snapshot

  • Office: Stabilizing. Direct vacancy dipped to 16.4% with 235,290 SF of positive Q3 absorption, while office searches on TenantBase doubled.
  • Industrial: Softening. Direct vacancy rose to 6.0% and asking rents fell 3.55% year over year.
  • Retail: Steady. Vacancy held at 5.7%, and retail tenants on TenantBase shifted toward shorter terms.
  • Multifamily: Stable. Vacancy ranges from 4.6% to 5.2% across major submarkets.

Los Angeles Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across Los Angeles County are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Office: 58.6%
  • Retail/Storefront: 37.9%
  • Warehouse/Industrial: 3.5%

Three-Quarter Trend

  • Office: 28.0% in Q1, 28.6% in Q2, 58.6% in Q3
  • Retail/Storefront: 41.7% in Q1, 45.6% in Q2, 37.9% in Q3
  • Warehouse/Industrial: 30.3% in Q1, 26.6% in Q2, 3.5% in Q3

Key Takeaways

  • Office demand doubled on TenantBase quarter over quarter, from 28.6% to 58.6% of Los Angeles searches, overtaking retail for the first time in 2026.
  • Short-term office tenants need more space. Office searches for terms under one year averaged 2,000 to 4,179 SF in Q3, nearly triple the 643 to 1,425 SF in Q2.
  • Office tenants are committing longer. Searches for terms under one year fell from 52.4% in Q2 to 38.5% in Q3, while 2 to 3 year terms rose from 17.9% to 29.7%.
  • Retail tenants moved the other way. Retail searches for terms under one year doubled from 16.6% in Q2 to 34.7% in Q3.

Office Market

Los Angeles office posted positive direct absorption in Q3 2026, though year-to-date absorption remains negative and leasing volume is well below 2025.

Key Metrics (Q3 2026)

  • Direct vacancy: 16.4%, down from 16.5% in Q2, with total vacancy including sublease at 17.7% (Kidder Mathews)
  • Q3 direct net absorption: positive 235,290 SF (Kidder Mathews)
  • Average asking rent: $3.50/SF per month full service, with Class A at $3.79 (Kidder Mathews)
  • Leasing: 3,210,365 SF in Q3, down 37.18% year over year (Kidder Mathews)
  • Highest-rent submarket: West Los Angeles at $5.09/SF (Kidder Mathews)
  • Largest lease: 206,300 SF at the Mattel Design Facility in the South Bay (Kidder Mathews)

TenantBase Office Activity

Demand share: 58.6% of Los Angeles tenant searches, up from 28.6% in Q2 and 28.0% in Q1.

Lease term preferences:

  • Less than one year: 38.5%
  • 2 to 3 years: 29.7%
  • 3 to 5 years: 20.9%
  • 5+ years: 9.9%
  • 1 to 2 years: 1.1%

Space requirements by term:

  • Less than one year: 2,000 to 4,179 SF
  • 2 to 3 years: 1,000 to 2,265 SF
  • 3 to 5 years: 1,667 to 3,500 SF
  • 5+ years: 5,167 to 9,583 SF

Top locations: Northwest LA and the San Fernando Valley was the most requested area across all space types in Q3, followed by the San Gabriel Valley, South Bay, Downtown, and West LA.

TenantBase data vs. the market: Los Angeles office demand on TenantBase is strongest in the San Fernando Valley, San Gabriel Valley, and South Bay rather than the urban core. That lines up with the market data: the Eastern San Fernando Valley has the lowest direct vacancy in the county at 5.9%, while Downtown and Miracle Mile carry far more availability. Tenants searching the Valley should expect competition, while Downtown and Mid-Wilshire offer the most leverage on rent and concessions.

Industrial & Warehouse Market

Los Angeles industrial softened in Q3 2026 as leasing volume fell and new Class A supply competed for tenants.

Key Metrics (Q3 2026)

  • Direct vacancy: 6.0%, up 30 basis points year over year, with total availability at 8.4% (Kidder Mathews)
  • Average asking rent: $1.36/SF per month NNN, down 3.55% year over year (Kidder Mathews)
  • Q3 direct net absorption: negative 686,385 SF (Kidder Mathews)
  • Largest lease: 338,899 SF at Port LA Distribution Center in the South Bay (Kidder Mathews)

TenantBase Industrial Activity

Demand share: 3.5% of Los Angeles tenant searches, down from 26.6% in Q2 and 30.3% in Q1. Industrial searches in Q3 were small-format, averaging 1,000 to 5,000 SF.

TenantBase data vs. the market: With rents falling and availability at 8.4%, small industrial users have more options and negotiating room, though tight submarkets such as the San Gabriel Valley remain competitive.

Retail Market

Key Metrics (Q3 2026)

  • Vacancy: 5.7%, up 10 basis points from Q2 (Kidder Mathews)
  • Average asking rent: $2.75/SF per month, down 2.54% year over year (Kidder Mathews)
  • Year-to-date net absorption: negative 173,708 SF, a sharp improvement from negative 1,132,087 SF a year earlier (Kidder Mathews)
  • Under construction: 697,446 SF (Kidder Mathews)

TenantBase Retail Activity

Demand share: 37.9% of Los Angeles tenant searches, down from 45.6% in Q2 and 41.7% in Q1.

Lease term preferences:

  • Less than one year: 34.7%
  • 2 to 3 years: 27.8%
  • 3 to 5 years: 22.2%
  • 5+ years: 15.3%

Space requirements by term:

  • 2 to 3 years: 1,000 to 2,000 SF
  • 3 to 5 years: 3,250 to 6,500 SF

TenantBase data vs. the market: More Los Angeles retail tenants on TenantBase are choosing flexibility, with short-term searches doubling in Q3. That fits a market where asking rents are slipping and landlords are more open to shorter commitments. Tenants seeking 3 to 5 year terms need roughly three times the space of 2 to 3 year searchers and are best positioned to negotiate.

Multifamily Market

Los Angeles apartment vacancy ranges from 4.6% to 5.2% across Greater Downtown, the South Bay and Long Beach, the San Fernando Valley, and the Westside, according to Institutional Property Advisors, with countywide vacancy down 40 basis points since the first half of 2024.

Q4 2026 Outlook

  • Office: Expect gradual stabilization, led by Class A space in Century City and the Westside and by small-suite demand in the Valley and South Bay.
  • Industrial: Expect tenant-friendly conditions to continue as new Class A supply is absorbed.
  • Retail: Expect stable vacancy near 5.7%, with more landlords accepting shorter terms.
  • Multifamily: Expect steady occupancy across major submarkets.

Frequently Asked Questions

What type of commercial space are Los Angeles tenants searching for in 2026?

In Q3 2026, office space made up 58.6% of Los Angeles tenant searches on TenantBase, followed by retail/storefront at 37.9% and warehouse/industrial at 3.5%. Office share doubled from 28.6% in Q2.

Which Los Angeles areas are tenants searching most?

Northwest LA and the San Fernando Valley was the most requested area on TenantBase in Q3 2026, followed by the San Gabriel Valley, South Bay, Downtown, and West LA.

What lease terms do Los Angeles office tenants want?

38.5% of Los Angeles office tenants on TenantBase sought terms under one year in Q3 2026, 29.7% sought 2 to 3 years, and 30.8% sought 3 years or longer.

What is the office vacancy rate in Los Angeles?

Los Angeles office direct vacancy was 16.4% in Q3 2026, with total vacancy including sublease at 17.7% and an average asking rent of $3.50/SF per month, according to Kidder Mathews.

What is the industrial vacancy rate in Los Angeles?

Los Angeles industrial direct vacancy was 6.0% in Q3 2026, with asking rents down 3.55% year over year to $1.36/SF per month NNN, according to Kidder Mathews.

How can I find commercial space in Los Angeles at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across Los Angeles County at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Los Angeles, July 1 to September 30, 2026
  2. TenantBase, Los Angeles Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Los Angeles Commercial Real Estate Market Report, Q1 2026
  4. Kidder Mathews, Los Angeles Office Market Report, Q3 2026
  5. Kidder Mathews, Los Angeles Industrial Market Report, Q3 2026
  6. Kidder Mathews, Los Angeles Retail Market Report, Q3 2026
  7. Institutional Property Advisors, Los Angeles Multifamily Market Report, 2Q 2026

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.