Los Angeles Commercial Property Sales Bounce Back In 2025 With $37B In Deals

After two rough years, CRE sales are on the rise in LA. 

Commercial real estate sales volume in the LA metro is on the rebound, reaching $37.3B at the end of 2025, up from $33B at the end of 2024 and $35B at the end of 2023, according to data from MSCI. These numbers are still well below the $51.4B in sales the area reached at the end of 2019. 

“It was a better year for all CRE participants in that the market really stopped sliding in 2025,” Colliers Vice Chair and Head of Office Capital Markets for the Southwest U.S. Sean Fulp said.  

Some of that was linked to a decrease in interest rates in 2025, Fulp said. But another factor was a reset of expectations of values and risk in the market.

“The market had gotten comfortable and found a way to make sense of real estate values based upon flattening fundamentals and also flattening capital markets,” he said. 

Fulp also dismissed comparisons to pre-pandemic sales volume, citing how much the real estate market has changed. 

"Commercial real estate as a whole has changed considerably, just how people use space, what remote work and hybrid work has done to the office market, how AI is reshaping how people use real estate." 

In the industrial sector, one of the property types that drove sales volumes in 2025, fundamentals in certain submarkets were on an upswing, and that drove the vast majority of the industrial sales activity in SoCal, JLL Director of Capital Markets Makenna Peter said. 

Peter pointed to a 615K SF industrial deal that pushed the Central LA submarket into high positive net absorption as one of the signals to investors that LA was on the rebound and now was a good time to buy. 

Peter also noted that some hot submarkets are attracting attention from investors because their rents are starting to tick upward. Though rents overall in the LA industrial market remained basically flat year-over year, some submarkets were boosted by specific demand drivers.

The South Bay submarket, for instance, saw the most new leasing activity in the LA market, thanks to aerospace and defense companies as well as logistics users, Peter said. 

Investors are seeing leasing activity and want to jump in at below-peak values, Peter said. Total leasing activity in 2025 reached approximately 33.3M SF, up from 29.7M SF in 2024, 24.3M SF in 2023 and 22.1M SF in 2022, according to Cushman & Wakefield. 

The return of rent growth in some areas has lit a fire under many owner-users, particularly in the LA and Orange County markets, that wanted to ensure greater control over the future of their space and are in a financial position to buy a building.

They're often able to make those purchases at a discount to the peak values that immediately followed the pandemic, Peter said. About 10.4% of buyers in 2025 were owner-users, up from 8.8% in 2024, she said.

Owner-users are plentiful in office as well, with buyers seeing opportunities to snap up properties, said Jeffrey Bramson, senior managing director and Los Angeles office co-head at JLL. In December, Riot Games paid $150M to its then-landlord, Hudson Pacific Properties, and another $81M to terminate its lease at the five-building campus Element LA and buy the property.

Not paying rent is just one of the advantages these buyers see in owning their own properties, Bramson said.

“Ownership comes with distinct tax shelter advantages,” he said. 

JLL estimates that 23% of Los Angeles office sales were to owner-users in 2025. 

It’s a phenomenon that has extended into 2026, too. Bramson said he is currently working on three sales to owner-users in the LA area with a total capitalization of $400M, one of which is set to close this week. 

Private capital, long the dominant type of buyer in Los Angeles, increased its market share in 2025. Data shows that 61.4% of all buyers in the LA metro were private capital in 2025, the highest amount in a decade.

Private capital is, across all property types, buying more often than it is selling. It made up just 51.2% of LA-area sellers in 2025, a figure that has decreased since 2020, according to MSCI.  

Institutional owners made up 24.4% of buyers in 2024 and 23.8% of buyers in 2025. Institutional buyers have been less active because they are waiting to see the returns that others get before they dive in, MSCI Research Executive Director Jim Costello said.

That is also connected to the drop in cross-border investment in Los Angeles, as there is notable overlap between institutional and cross-border buyers, Costello said. These buyers have to go through a process before allocating capital for acquisitions that requires them to have a strong argument for why they should put more money into a property type, he said.  

“Until people see a good track record of a couple years of good returns, they just don't want to allocate more,” Costello said. 

Cross-border buyers’ market share had stayed largely flat in 2024 and 2025, hovering around 5%, though it has dried up significantly in 2026 year-to-date, according to MSCI figures. Costello dismissed the urge to see that change as connected to politics, calling it too early to tell.  

“It's not necessarily like a negative political reaction, but it is a risk reaction, because systems are changing here, and it's harder to underwrite something when you don't know what the rules of the game are going to be in two weeks, let alone six months,” Costello said.