Data Courtesy of CoStarâ„¢
Space availability continues to rise across the Los Angeles as the retail market contends with weak demand. Net absorption has tallied -1.1 million SF during the past 12 months, with 2025 marking the third consecutive year of negative absorption for retail in Los Angeles. Coupled with limited new deliveries (-617,000 SF cumulatively since 2023), total availability ticked up to end the year at 6.3%. This is also the highest local level in more than 10 years.
Availability has risen for mid-sized boxes between 5,000 SF and 25,000 SF. The rate 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
12 Mo Rent Growth
12 Mo Sale Volume
Supply-side pressure to vacancy has been limited. Inventory has fallen by a net of -2.1 million SF over the past five years, and the pipeline only represents 0.1% of the region's existing stock. Old, obsolete inventory is being steadily demolished; annual net deliveries is -160,000 SF. Most new deliveries skew smaller in size and almost all are build to suit.
Leaner demand and weak consumption growth have impacted rents. Rent growth has measured -1.1% during the past 12 months, compared to 1.8% across the U.S. Among L.A.'s submarkets, some more 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 8.9%. Last cycle, embedded rent growth between 2015 and 2019 tallied 13.5%.
The factors affecting the Greater Los Angeles retail market are likely to continue in the near term. The forecast projects ongoing negative net absorption from retailers until 2026, though occupancy losses may slow down. Supply side pressure is expected to be limited to moderate, which could limit the increase in availability. As a result, rent growth in this market is expected to be below the national average.
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