Upcoming Office Maturities in LA and Orange County Could Unlock More Sales

Office leasing activity in Los Angeles has cooled off but remains well above long-term norms, indicating an area that's stabilizing and gradually regaining its footing, according to Savills' Q1 office market reports for the city and Orange County.

Dalton Brusseau, research director at Savills, told GlobeSt.com he is also seeing early signs of expansion return, with some occupiers taking larger blocks of space, even as most remain focused on efficiency in a hybrid environment.

Asking rents have now climbed for four straight quarters, particularly in top-performing submarkets like Century City and Beverly Hills, underscoring improving demand at the high end of the market.

"At the same time, the disconnect between asking and effective rents will likely remain, as landlords continue to use concessions strategically to win tenants," Brusseau said.

"The steady decline in sublease availability is another positive sign that excess space is being worked through, though overall availability is still high and will take time to normalize."

Looking ahead, he said the wave of loan maturities over the next two years could help unlock more sales activity and repricing in both LA and Orange County, creating the conditions for a more active investment market and a broader reset in market dynamics.

Across LA exclusively, leasing activity overall is still 8% above the five-year quarterly average. It totaled 3.5 million square feet in Q1 2026, decreasing by 8.5% quarter-over-quarter, but up a modest 2.7% year-over-year.

The overall average asking rent rose to $4.06 per square foot in Q1, up 0.5% from the previous three months and 2.9% year-over-year. Class A rents rose to $4.34 per square foot, up 0.5% from the prior quarter and 3.2% compared to a year ago. Century City and Beverly Hills continue to command the highest rents in the market.

Average asking rents are expected to continue trending upward as sublease availability declines and space transitions back to direct inventory.

Landlord concessions should remain elevated amid near record-high availability levels, as owners continue to compete aggressively to attract tenants.

A substantial volume of loans is scheduled to mature in 2026 and 2027, as noted above, potentially driving increased transaction activity as assets transition between owners.

Orange County's office market is performing squarely in line with its multi-year trend, signaling a steady, predictable start to the year rather than a breakout or a pullback.

First-quarter leasing reached 1.3 million square feet, matching the upper end of the 1–1.3 million-square-foot range recorded in each of the past three first quarters. Activity was driven largely by smaller deals, with most major leases hovering around 20,000 square feet—consistent with the county's post-pandemic deal profile.

The market's most notable shift is on the availability side, with the rate falling to 19.1%, a sharp 340-basis-point improvement year-over-year and a 30-basis-point drop from last quarter. With minimal new construction and ongoing office-to-other-use conversions, availability is expected to continue to tighten.

Landlords facing debt pressures are holding asking rents steady and leaning more heavily on concessions, while well-capitalized owners are adjusting amenities and layouts to keep leasing momentum moving.