Are better days ahead for downtown LA? Boosters count the ways

More workers, jobs and residents return to the city center, a new survey shows

The federal government has called workers back to the office five days a week, helping fill more downtown Los Angeles desks like those at the Department of Justice and the U.S. Army Corps of Engineers' space at 915 Wilshire Blvd. (CoStar)

By Brannon Boswell

CoStar News

March 19, 2025 | 2:18 P.M.

Downtown Los Angeles boosters say they are seeing promising signs better days are on the horizon for one of the country's hardest-hit office markets following the pandemic.

The number of workers visiting downtown Los Angeles hit a post-pandemic high in the fourth quarter of 2024, according to the DTLA Alliance, a group comprised of 2,000 property owners that oversees the 65-block downtown business improvement district.

At the same time, more downtown residents report they feel safer and happier, while multifamily occupancy rates are consistently north of 90%, according to Nick Griffin, the district's executive vice president.

In-person office mandates, a concentrated housing push and an increase in job availability has contributed to signs of a recovery for a region that has struggled more than similar sized downtowns across the country in returning to pre-pandemic levels of real estate activity.

Downtown LA's office vacancy is up to 21% from 20% a year ago with tenants having given back 661,000 more square feet of office space than they leased in the past year, according to CoStar data. National office vacancy, meanwhile, is holding steady below 14%.

Downtown Los Angeles "has made significant progress in key sectors like residential, hospitality, and retail, but there is still work to be done to ensure a thriving, competitive urban core," Griffin said in a statement.

Back-to-office push

About 81% of downtown employers surveyed said they plan for at least 50% of employees to work full time from an office in 2025.

Anecdotally, "we're seeing more bodies downtown, even just walking around," said Erica Finck, managing director of the capital markets group at Cushman & Wakefield in Los Angeles.

Downtown Los Angeles, home to 150,000 public sector jobs, is seeing a boost from the nationwide return-to-office trend. Federal and state mandates are driving thousands of government employees back to downtown workplaces. In one of the most significant shifts, Gov. Gavin Newsom has ordered nearly 100,000 state workers to return to the office four days a week starting in July.

Downtown Los Angeles has the highest concentration of government office workers of any office hub in the city.

At Deka Immobilien’s 915 Wilshire Blvd, the Army Corps of Engineers and Department of Justice occupy roughly one-third of the building, reflecting the significant public sector presence in the area.

Overall, the number of jobs in downtown Los Angeles has grown by almost 10% since 2021, with wages growing by an even more impressive 23%, according to the survey.

An uptick in office transactions over the past 18 months is also helping revive the downtown leasing market, Finck said. The number of office property transactions closed in the past year is up by 114% year over year, according to CoStar data. Meanwhile the average asking rent is down slightly year-over-year to $38 per square foot, below the greater Los Angeles market office rent average of $42 per square foot.