Trophy buildings in two desirable neighborhoods drove rent growth in Los Angeles' office market in the first quarter.
Century City and Beverly Hills are outliers in the LA market, Savills Research Director Dalton Brusseau told Bisnow via email. Leasing interest in those two areas contributed to the average asking rent increasing by 2.9% annually to $4.06 per SF, according to Savills' latest report.
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Rents in Century City and Beverly Hills were $7.45 and $6.33 per SF, respectively, while Downtown came in at $3.76.
Sublease space is also converting to direct space upon expiration, and those market rents are higher than the previous sublease asking rates, raising overall asking rents.
Landlords are holding the line on asking rents to preserve valuations of their buildings and are usually offering generous concessions on deals, Brusseau said.
"The rise in asking rents is more a signal of landlord pricing discipline and improving competitive positioning in select product than a sign of broad-based pricing power across all inventory," he said.
Overall availability remained relatively flat year-over-year, with Q1's 27.3% roughly the same as Q1 2025's 27.9%.
Leasing activity rose slightly in the first three months of the year, with 3.5M SF transacting, up from 3.4M SF in Q1 2025.
Meanwhile, concessions are expected to remain above pre-pandemic levels as owners fight to attract and retain tenants. Typical concessions include free rent, but some landlords may go so far as offering flexible lease terms, early termination, and free or discounted amenities, Brusseau wrote.
"Well-capitalized landlords will continue to attract top-tier tenants due to their ability to offer generous concession packages while others who cannot will have more difficulty," he said.
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