Los Angeles office is improving, but the recovery has an address.

Where Demand Is Going

Century City is doing what strong markets do: taking the first calls.

Colliers' Q2 report shows the Westside taking an outsized share of major leasing. Half of the top 20 Q2 leases were in West Los Angeles, and Century City captured the two largest deals: PwC at 2121 Avenue of the Stars and Bank of America at 2049 Century Park East.

That lines up with Bisnow's reporting on the quarter, which framed Century City and the Westside as brighter spots in an otherwise uneven LA office market. The tenant mix matters. Law firms, financial services, accounting, and other relationship-heavy businesses still have reasons to pay for high-quality space in the right location.

Creative office is a different story. Entertainment and technology demand is still more selective, and that shows up in the divide between trophy assets with committed tenants and older buildings trying to prove their next use.

What Changed From Q1

The quarter got better at the margin, not across the board.

In Q1, Colliers described a market moving toward gradual stability: negative absorption had improved from late 2025, sublease availability had declined for seven consecutive quarters, and leasing activity exceeded the 2025 quarterly average.

Q2 continued that story, but with a cleaner split. Net absorption improved from a 274,060-square-foot loss to an 84,933-square-foot loss. Sublease availability improved again. Leasing held steady. But overall vacancy still rose, asking rents slipped slightly, and not every submarket participated.

The market is saying something fairly practical: tenants are making decisions again, but they are not rescuing every building. They want location, quality, flexibility, and a reason to ask employees to show up.

Buyers

Distress exists, but so does a quality premium.

For buyers, this is not a market where every office building should be treated as a bargain just because vacancy is high. The numbers reward discrimination.

Well-located assets with durable tenants, plausible leasing momentum, or conversion potential can still attract real interest. Meanwhile, commodity office with weak tenancy, heavy capital needs, and no clear adaptive reuse path may need a very different price to make sense.

The underwriting question is not simply "how cheap is it?" It is: who is the next user, what will they pay, how much capital is needed to get them there, and what happens if the answer takes three years instead of one?

Sellers

The market will pay for a story it can verify.

Sellers have to separate hope from evidence. A building near leasing momentum, transit, strong tenant demand, or credible conversion logic can be positioned differently than a building asking buyers to buy a spreadsheet and a prayer.

That means the sale process should make the useful facts obvious: tenancy, rollover, submarket performance, capital plan, replacement cost, parking, floor plates, entitlement context, and any realistic path to residential or alternative use.

Owner-user buyers deserve special attention. In a commoditized office market, they are often looking for the opposite of commodity: a building with identity, control, useful layout, signage, parking, outdoor space, creative character, expansion potential, or a location that fits the way their business actually works.

For those buyers, the marketing should not merely say "office building available." It should show why this building could become a headquarters, studio, showroom, professional office, medical-adjacent use, production base, or long-term home for a business that wants to stop renting someone else's idea of space.

In a selective recovery, buyers will pay for clarity. They will discount confusion. Sellers who can make the property's difference obvious will have a better chance of escaping the bargain-bin math applied to generic office inventory.

The Takeaway

This looks less like a rebound and more like a sorting machine.

LA office is showing signs of repair: smaller occupancy losses, declining sublease availability, steady leasing, and real strength in places like Century City.

But the recovery is not democratic. It is favoring better locations, stronger tenant bases, and buildings with a believable future. That is useful for buyers and sellers because it narrows the conversation.

The old question was whether office was dead. The better question is which buildings still have a reason to live, and at what price.