Continuing COVID vaccinations may mean a return to pre-pandemic ways of life, but what will a return to the office look like? According to a new report from commercial real estate services and investment firm CBRE, it’s likely to be a long road to recovery for the L.A. office market.
Per CBRE’s Q1 MarketView report, L.A.’s vacancy rate has reached a pandemic-high of 17.1 percent, even as physical office occupancy began a slow upward climb last quarter. Continuing widespread vaccinations may bring economic stabilization by mid-year, however the report notes that full recovery of the office market is likely to take several years due to the substantial decline in office-using employment and a meaningful shift toward remote work.
On a positive note, CBRE shares that increased touring activity is an encouraging indicator for the local office market.
Looking at commercial leases, the report states that landlords have not let up on asking rates in the face of reduced demand, instead offering concessions and incentives. The market’s average asking rate climbed slightly last quarter with Los Angeles County rates at $3.90 per square foot/month.