Commercial Observer
Jul 10, 2025
Renewed investor interest, and a focus on fighting crime and cleaning encampments ahead of the 2028 Olympics, could help the beleaguered area finally turn a post-COVID corner.
Downtown Los Angeles was facing impossible odds. But like some kind of civic Rocky, it has come battling back from the brink.
Such a statement would’ve been difficult to fathom over the past five years. Downtown office vacancy reached alarming levels in 2023 — topping 30 percent — as tenants grappled with remote work or fled to higher-quality space elsewhere in the region, most frequently to L.A.’s Westside. Hundreds of millions of dollars in debt tied to the office towers that form the city’s skyline began to mature, leading to serious financial distress and numerous defaults. Brookfield, once the largest office landlord in Downtown L.A., started handing back the keys to lenders.
And all the while, with far fewer people going downtown to work every day, crime and homelessness ran rampant after 2020, fostering an even uglier perception of the area as chaotic, dirty and unsafe.
Many of those challenges remain. The residential and multifamily markets are surging, with occupancy rates above even pre-COVID averages (nearly 91 percent, according to recent estimates), but downtown’s office vacancy rate remains stubbornly high — 27.5 percent in the first quarter of this year, according to a market report by Colliers. Homelessness and crime is still prevalent compared to other urban centers across the country. Yet, for many who work, live or own space downtown, momentum is beginning to shift toward what feels an awful lot like hope — or at least a light at the end of the recovery tunnel.