The Los Angeles office market looks very different now than it did just a few years ago.
For a long time, large REITs and pension funds drove ambitious adaptive reuse and ground-up office and mixed use developments across the city, but that momentum has slowed for some time now. Rising interest rates, higher costs and slower leasing have kept many institutional investors on the sidelines waiting for the market to turn. Stepping in are private equity firms and other non-institutional investors, including family-owned businesses or tenant-owners in some cases, who are taking a more hands-on role.
The way commercial building projects are moving forward has also changed. Instead of committing to full-scale transformations immediately, many investors prefer phased delivery that spreads out risk. These smaller steps allow them to adjust as conditions change, whether that be tenant demand, financing or construction costs. This approach puts more emphasis on collaboration that often requires the architect and construction team to serve as advisers, helping balance what can be done now with what makes sense long-term.
Adaptive reuse is where this trend is most apparent. As a premier example, Mother LA in West Adams was designed around the needs of one client from the very beginning, rather than renovating a spec space and hoping a tenant would come. Improvements were phased in-step with the client’s growth, ensuring each dollar spent (TI or otherwise) had a true purpose. This model has proven more resilient than speculative upgrades in today’s climate.
Phased work also addresses the everyday challenges of keeping businesses running during construction. By working in smaller phases, companies are able to keep operations on track while still moving toward a master plan. This is an approach usually seen on the spec side, but architects are now doing it with tenants to maximize the investments from all sides. These kinds of logistics may not be visible from the outside, but they often determine whether or not a project succeeds.
Another shift is that tenants are buying buildings instead of leasing them. For many, this comes down to control. Rising interest rates and the cost of borrowing are part of the equation, but so is the desire for stability and control. In some cases, buying has been easier than leasing when prices made the decision more practical. Ownership also allows tenants to invest in upgrades with confidence that their efforts will last.
For the spec work that is still moving forward, identity has, in fact, become one of the main drivers in Los Angeles’ office market. Each neighborhood calls for a different strategy. The repositioning approach in Beverly Hills’ Golden Triangle, for instance, will differ greatly from what appeals to law firms in Century City or tech companies in El Segundo. Design details – from art and materials to amenities and spatial programming – are tailored to the tenants who define each area’s character and culture.
Streetscape activation is another important repositioning strategy, especially in neighborhoods with limited room for expansion. Starpoint, for example, has put forward plans to convert a portion of 450 N. Roxbury’s existing parking garage into boutique retail space to appeal to luxury brands looking for a Beverly Hills address. Similarly, the ongoing phased repositioning at 888 S. Figueroa in downtown Los Angeles shows how incremental upgrades can breathe new life into existing assets for both tenants and the surrounding community: Phase 1 refreshed corridors and restrooms, Phase 2 reactivated the building’s street presence with the addition of Couplet Coffee and an impressive new lobby, and Phase 3 adds a rooftop deck to extend usable tenant space.
The market is also seeing supply removed from the market in some areas. Culver City, for example, recently upzoned some neighborhoods to introduce more housing, so plans for one office project pivoted completely to residential. The takeaway is that there’s no single formula: What works in one submarket won’t necessarily work in another.
Regardless of location, however, wellness and sustainability features are requirements in nearly every project. Tenants consistently ask for better daylight, air quality and comfort as part of attracting and retaining employees. At 9595 Wilshire, smart glass was added to improve comfort and reduce energy use. Mother LA emphasizes creative reuse and phased improvements tailored to local tenants. These features are now seen as must-haves, not extras, and they often influence which buildings lease up and which sit vacant.
For landlords, the challenge lies in deciding where to invest. With leasing velocity still slow, speculative amenity packages risk over-investment. Capital improvements have to be tied directly to tenant demand, long-term value and resiliency. Projects that strengthen operational efficiency, lower energy use and maintain flexibility against market fluctuations are proving the most future-ready. This is why engaging design and construction teams early in projects matters. Phased plans, clear priorities and targeted upgrades help avoid wasted spending while creating offices people want to be in.
Together, these changes show that Los Angeles is moving away from a one-size fits-all model of office development. The city’s future will be defined by three things: flexibility, identity and partnership. Flexibility allows projects to adjust to financing, scheduling and hybrid work needs. Identity ensures buildings reflect their tenants and stand out in a saturated market. Partnership between landlords, tenants, investors and architects makes it possible to deliver projects that work in a cautious economy.
Los Angeles has always been a metropolis of reinvention, and its offices are no different. By focusing on these three things, the market can adapt to today’s challenges and position itself for long-term success.
Sejal Sonani is a managing partner at HLW, a design firm based in New York. She oversees the company’s Los Angeles and San Francisco operations.
