T
he Los Angeles office market has been experiencing a tumultuous period since the pandemic, with many workers opting to work from home and not all returning to the office. However, most developers and brokers agree that the market has bottomed out, with Class A projects continuing to see success. Kevin Shannon of Newmark Group Inc. notes that the Los Angeles office market is in a "healing stage."

    Sonnet Hui, general manager and vice president at Project Management Advisors Inc., attributes the challenges facing the office market to the blurred line between work and home life post-pandemic. Hybrid work models have become the norm, making it difficult for businesses to entice employees back to the office while still providing flexibility. While some areas have rebounded to pre-pandemic levels, others like DTLA are struggling.

    Todd Doney of CBRE Group Inc. notes that offices now compete with the comfort and convenience of home, making it challenging to attract employees back to traditional office environments. Many employees feel more productive at home without distractions, and the flexibility of remote work has shown them that balance is achievable and desirable.

    PMA recently relocated its own office downtown, choosing a central location in a historic building that offered unique characteristics and amenities desired by employees. The firm surveyed its employees to determine what would motivate them to return to the office, finding that a variety of workspaces was key.

    Hui advises companies on their office portfolio by focusing on high employee engagement and satisfaction, which is crucial for retaining and attracting top talent. She emphasizes trends such as food options, mental health and wellbeing, flexible working hours, seamless technology, and curated office events.

    Looking ahead, Hui predicts a gradual rebound in the Los Angeles office market, with recent leases indicating office leasing activities are picking up. The market is beginning to stabilize and pick up in certain areas, with a clear distinction emerging between Class A properties and Class B and C properties.

    Bob Tarnofsky of Continental Development Corp. notes that El Segundo has been a beneficiary of tenants leaving downtown Los Angeles, with his company's office park being 85% to 90% leased. He attributes this to the area's proximity to higher-end residential and its business-friendly environment.

    Kellie Kao Miles of ULI Los Angeles sees a rebound in the mid-to-long term for the Los Angeles office market, despite current challenges. She notes that companies are seeking quality products with amenities that enhance collaboration and productivity, while also providing flexibility and coworking spaces.

    Kevin Shannon of Newmark Group Inc. predicts a general rebound for the Los Angeles office market starting in late 2025 or 2026, particularly for struggling submarkets. He attributes this to the market having bottomed from a capital markets perspective and institutional buyers playing to win on Class A office product.

    Anneke Greco of Colliers notes that the Los Angeles office market is lumpy and inconsistent, with vacancies remaining high in many submarkets. However, she sees a rebound happening as companies seek quality products with amenities and flexibility.

    Jaclyn Ward of Jones Lang LaSalle Inc. predicts a meaningful rebound for the Los Angeles ecosystem and core economic drivers, but it will take time and intentionality. She notes that strong leadership at a local level is needed to bounce back meaningfully.

    Brian Saenger of The Ratkovich Co. remains committed to infill properties and sees value in working together in-person in a pleasant environment. He believes there is interest in office spaces that motivate people to leave their home offices, citing his company's Bowcroft Collection media campus as an example.

    Jeff Worthe of Worthe Real Estate Group notes that the company has been active in the Burbank market, with a focus on media-related office and production uses. He attributes this to good demand in the market and anticipates being there for the long term.