Data Courtesy of CoStarâ„¢
Space availability continues to rise across Los Angeles as the retail market contends with weak demand. Net absorption has tallied -120,000 SF during the past 12 months, with 2025 marking the third consecutive year of negative absorption for retail in Los Angeles. Despite limited new deliveries ( -850,000 SF cumulatively since 2023), total availability has ticked up to end the year at 6.3%, the highest local level in more than 10 years.
The rise in availability can mainly be attributed to mid-sized boxes between 5,000 SF and 25,000 SF. The rate for this size box has increased almost 100 basis points since the start of the year to its highest level in a decade, as national brands have filed for bankruptcy or have closed underperforming stores in this general size range across the region. Joann, Party City and Rite Aid are among the retailers to announce closures this year in Los Angeles. There are potential signs of improvement as national store closures in 2025 dropped by 45% compared to 2024. This trend is likely to result in fewer vacant stores from national retailers at the city level in 2026.
12 Mo Deliveries in SF
12 Mo Net Absorption in SF
Vacancy Rate
Market Asking Rent Growth
12 Mo Sale Volume
Supply-side pressure to vacancy has been limited. Inventory has fallen by a net of -850,000 SF over the past three years, and the pipeline only represents 0.1% of the region's existing stock. Old, obsolete inventory is being steadily demolished, with demolitions averaging 210,000 SF annually over the past three years. What new developments are completing skew smaller in size and almost all are build to suit.
Leaner demand and weak consumption growth have impacted rents. Rents have declined by -0.8% during the past 12 months, compared to 1.8% growth across the U.S. Among L.A.'s submarkets, suburban locations with lower availabilities had the smallest decline in rent growth, whereas many Westside locations have seen rents fall more dramatically. Over the past five years, rents have grown 8.2%, which is slower than the rent growth between 2015 and 2019 which tallied 13.5%.
Elevated unemployment, slow job growth, and population loss will likely continue to weigh on the Greater Los Angeles retail market for the near term. The forecast projects ongoing negative net absorption from retailers for several years, though at a lower rate as occupancy losses may slow down. Supply side pressure is expected to be limited, which will limit the increase in availability. Rent growth in this market is expected to be below the national average.
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