2025 Westside Los Angeles Commercial Real Estate Year-End Review & Strategic Outlook

By Nina Steiner
Call/Text 310.487.2982
Santa Monica • Culver City • Playa Vista • Marina del Rey • El Segundo

Why I Wrote This

I work daily with tenants, owners, and investors across the Westside of Los Angeles, and 2025 generated more confusion than clarity for many people trying to make real estate decisions. Headlines leaned dramatic. Data points were often taken out of context. And too many conversations skipped the nuance that actually matters when you are signing a lease, renewing, relocating, or deciding whether to hold or sell an asset.

I wrote this year-end review to ground the conversation. Not to sell fear or optimism, but to reflect what really happened on the Westside, what I’m seeing firsthand in deals and negotiations, and how companies and owners can think more strategically heading into 2026. This is meant to be practical, honest, and usable.

2025 Market Reality: What Really Happened

If I had to sum up 2025 on the Westside in one word, it would be recalibration. Not collapse. Not recovery hype. Just a very real reset.

Higher borrowing costs, more disciplined tenants, and cautious but still active capital forced the market to get honest. Pricing had to make sense. Deals had to pencil. And conviction mattered more than optimism. The Westside didn’t lose its fundamentals, but it did lose its tolerance for fuzzy math and emotional decision-making.

As Colliers noted in its Greater Los Angeles office research, vacancy reached roughly 24 to 24.4 percent by mid Q3 2025, while year-to-date leasing still landed around 7.0 to 7.3 million square feet. In other words, pressure was real, but the market was still moving.

What Drove the Shift

Capital markets caution
Underwriting got tougher, risk premiums widened, and lenders asked better questions. Investors had to explain not just what they were buying, but why it made sense long term. Strategy replaced speculation.

Tenant discipline
Tenants stopped guessing. Space decisions became tied directly to revenue models, hiring plans, hybrid realities, and operational efficiency. Square footage for the sake of square footage stopped working.

Selective investor confidence
Capital didn’t disappear. It got selective. Investors leaned toward irreplaceable locations and durable industries instead of chasing trends. The Westside rewarded patience and clarity.

Vacancy, Rents, and Tenant Behavior

Elevated Vacancy, Selective Absorption

Westside vacancy hovering around 19 to 20 percent tells a very specific story. This is a split market. Buildings with real identity, strong amenities, and clear positioning still have leverage. Commodity office without a reason to exist is struggling unless owners are willing to reposition, reprice, or get creative with concessions.

What I’m Seeing on the Ground

Flight to quality
Companies are choosing offices that support culture, productivity, and credibility. Strong buildings are still commanding attention and rent, even in uncertain times.

Commodity space gets punished
Outdated buildings with no story are learning a hard lesson. Average no longer survives. The market is unforgiving when a space feels interchangeable.

Real negotiation leverage
Well-positioned tenants are securing more than rent breaks. Longer TI amortizations, flexible structures, exit protections, and smarter lease mechanics are all on the table.

Lancelot Commercial reports Class A Westside asking rents in the $5.13 to $5.68 per square foot full service gross range, well above the Los Angeles County average of roughly $3.50 to $3.58. That pricing gap tells you where tenants still see value.

Industrial and Flex: Tight, Functional, Essential

Industrial remains one of the most grounded asset classes on the Westside. Vacancy around 4 to 5 percent confirms scarcity. Proximity to LAX, aerospace users, logistics infrastructure, and technical labor keeps demand durable.

Why Industrial Holds Up

Operational demand
These tenants are revenue driven. Space is not optional. That makes occupancy stickier.

Geography matters
Access to air cargo, ports, and engineering talent creates a real moat. Companies locate here because the ecosystem makes them better.

Investor confidence
Cushman & Wakefield data shows Q2 to Q3 2025 industrial vacancy across LA in the 4.8 to 5.4 percent range, with asking rents around $1.34 to $1.52 NNN. Westside flex and industrial often trades higher, frequently between $2.25 and $2.75 NNN, because inventory is limited and functionality matters.

Submarket Breakdown: What Makes Each Area Distinct

Santa Monica: The Premium Core of Silicon Beach

Santa Monica still carries psychological weight. Leasing here signals credibility, lifestyle alignment, and innovation. Companies don’t just rent space here. They buy into a brand.

Occupiers see Santa Monica as an extension of their identity. It attracts younger, highly skilled talent who want walkability and coastal energy. Premium pricing reflects ecosystem value, not just square footage.

Wikipedia notes that the broader Silicon Beach region hosts more than 500 tech companies, including Google, Snap, and Meta, reinforcing why this area continues to command attention.

Culver City: Media, Content, and Creative Gravity

Culver City works because it sits where storytelling meets technology. Studios, production, gaming, and tech-backed entertainment form a real economic engine.

Amazon Studios at The Culver Studios, HBO, and Apple Music’s flagship studio all reinforce this cluster. With over 700,000 square feet of studio, office, and stage facilities, Culver City has become one of the densest media hubs in the region, according to The Culver Studios.

What I like about Culver is that growth here is organic. When studios expand, vendors, agencies, and tech partners follow. That’s durable demand.

Playa Vista: Corporate Campuses Built with Intent

Playa Vista succeeds because it was planned properly. Campus environments, outdoor space, and infrastructure support long-term thinking.

Companies feel settled here. Leadership can host investors and boards in environments that communicate structure and seriousness. The curated tenant mix reduces volatility and builds credibility.

Major global players like Google, YouTube, and Verizon anchor the area, supported by purpose-built Class A campuses designed for long-term occupancy, as highlighted by Playa Vista economic summaries.

Marina del Rey: Lifestyle Stability and Intentional Choice

Marina del Rey attracts companies that prioritize quality of life. Decisions here are slower and more thoughtful.

Professional services, finance, and boutique firms perform well. Executive housing, waterfront access, and lifestyle amenities matter. Wikipedia places Marina del Rey within the broader Silicon Beach corridor, but with a stabilizing residential and executive profile that supports consistent tenancy.

El Segundo: Aerospace, Defense, and Real Infrastructure

El Segundo is driven by industries that cannot go remote. Aerospace, defense, robotics, and advanced manufacturing anchor this market.

The city brands itself as the Aerospace Capital of the World. According to El Segundo Business and local economic development sources, companies like Northrop Grumman, Boeing, Raytheon, and Lockheed Martin create deeply rooted, contract-backed demand that keeps this submarket resilient.

Asset Class Insights

Office: Not Dead, Just Rationalized

Office is evolving. Tenants want relevance, flexibility, and productivity impact. Smart square footage beats excess.

Cushman & Wakefield reports LA office vacancy near 24 percent with negative net absorption through Q3 2025. Yet West LA rents above $5 per square foot show that tenants will still pay for locations that support their story.

Industrial and Flex: Strategic by Nature

Industrial space on the Westside is infrastructure. Demand is driven by necessity, not preference. Long-term relevance remains intact.

Creative Space: Authentic or Irrelevant

Creative office only works when it’s real. Poorly executed warehouse conversions don’t fool tenants anymore.

Colliers notes that large Westside deals over 20,000 square feet in Q3 2025 clustered in true creative campuses like Culver City and Playa Vista, confirming that authenticity wins.

Adaptive Reuse: Strategic, Not Romantic

Adaptive reuse only works when economics, zoning, and real tenant demand align. The Washington Post has repeatedly highlighted that only a small fraction of office stock is truly convertible. Creativity without feasibility doesn’t work.

Guidance for Companies

Renewing

Renewals should secure flexibility, infrastructure upgrades, and future optionality, not just lower rent. JLL surveys show flexibility clauses and TI packages now rank alongside rent in importance.

Relocating

Relocation is branding. Talent access, leadership optics, commute psychology, and market signaling all matter.

Downsizing

Done well, downsizing is optimization. Cushman & Wakefield research shows firms that rightsized intentionally saw stronger performance and morale than those that abandoned office entirely.

Guidance for Owners and Investors

Holding

Selective upgrades matter. CBRE data shows West LA Class A landlords sustaining rents north of $5 per square foot by investing in systems and tenant experience, not cosmetic fixes.

Selling

The Los Angeles Times reports that 2025 trades favored stabilized or clearly repositionable assets. Commodity offices without a story struggled to clear.

Investing

The Washington Post documents massive value resets nationally, but prime assets are rebasing, not collapsing. Irreplaceable locations outperform timing speculation.

2026 Outlook

If borrowing costs ease, confidence returns first to quality. Cushman & Wakefield MarketBeat data already shows improving absorption trends heading into late 2025.

Tenant decision-making continues to mature. JLL and other global brokerages consistently report that culture, brand, and workplace strategy now sit alongside cost in C-suite decisions.

That’s the real shift. Space is no longer just space. It’s strategy.

By Nina Steiner
Call/Text 310.487.2982