LOS ANGELES, CA-The 6.723 million sf of leased but empty office space in the Los Angeles basin continues to drag down the market, according to a new report by Grubb & Ellis and PNC Real Estate Finance, but the amount of sublease space in L.A. is below the national average as a percentage of overall vacant space.

The 6.723 million sf of sublease space represents 20.1% of the total available space in the L.A. market, but nationwide, the country’s 142 million sf of sublease space represents 24% of all available office space, the report says.

The amount of sublease space actually declined in the second quarter, the report says, but that doesn’t necessarily mean the office market is on its way to recovery. As the leases expire on leased but empty space over the next three years, that space will go back to landlords and add to the inventory of empty space offered on a direct basis.

The result, the report says, will be “a race over the next three years between any market recovery and the rate at which sublease space expires and returns to the market.” The researchers believe the sublease space will “delay but not reverse a market recovery.”

Most landlords are still being collecting rent for the leased but empty space in their buildings because most of the leases were signed with credit tenants, the report says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.