H2 2024 & 2025 Office Space Market Outlook

2024 Market Data and 2024 Outlook

2025 Market Outlook for Downtown Long Beach Office Space

The 2025 market outlook for the 4 million square feet of commercial office space in Downtown Long Beach (CBD), which includes Class A, Class B and three Class C buildings, is no longer facing downward pressure or accelerating in decline.  Overall CBD vacancy rates is around 24%  entering 2025. Rates are more tricky to project but occupancy has likely seen the bottom.

Downtown Long Beach Outlook

Some Class B office buildings, specifically 180 E Ocean, 200 Pine Ave., 211 Ocean Blvd and 100 Broadway., are benefiting from a “flight to quality.” Translated this means tenants trade up to better-quality spaces.  But more often it’s less square footage.  This trend is expected to continue through 2025. As a result, the three Class A projects in the CBD (World Trade Center, Shoreline, and Landmark Square) may see some positive effects. However, these buildings still face significant occupancy challenges, especially Landmark Square.

 

Suburban Long Beach Outlook

The suburban office market in Long Beach tells a more positive story. The additional 4 million square feet of suburban space, particularly at Douglas Park near Long Beach Airport which is over 95% occupied. Overall, the suburban market remains stable, with an average vacancy rate of around 15%.  Bixby Knolls is at 84% occupied and the airport area is 83% occupied.

Long Beach Office Space Market and City Overview

City of Long Beach: A Unique and Thriving Profile

Long Beach defies simple definition—and that’s one of its greatest strengths. With oceanfront beaches and what Heal the Bay rates as A+ for clean water being Alamitos Bay, the city is both an industrial powerhouse and a vibrant coastal destination. It boasts six prominent shopping neighborhoods, each offering a unique mix of businesses, retail, art, and history.

While the downtown business district faces challenges, with businesses leaving, thousands of new apartments have been built and are mostly leased. Despite urban struggles, the residential market and suburban business districts tell a much brighter story.

A Diverse and Dynamic City

Belmont Shore exemplifies the California beach lifestyle with trendy restaurants, boutique shopping, and fitness hubs. Other notable areas include 2nd & PCH, Retro Row on 4th Street, LBX and The Hangar at Douglas Park, the East Village Arts District, and Bixby Knolls. These neighborhoods highlight Long Beach’s diversity—a major factor driving its continued growth and appeal.

Historically, institutional investors from New York and beyond overlooked Long Beach, unsure of its potential. That view changed long ago. In the past eight years, over 4,000 rental units have been built downtown, with another 4,000 units planned, in progress, or under construction.  Institutions and sophisticated well-capitalized developers continue to bet long on Long Beach.

California’s Housing Affordability Act further mandates the development of 25,000 new homes in Long Beach over the next eight years. At least 12 affordable or mixed-income projects, ranging from 50 to 100 units each, are already nearing approval or completion.

This demand reflects Long Beach’s thriving residential market, strong suburban office space performance, and vibrant retail activity in many areas. Together, these factors reinforce Long Beach as a vital economic hub within the Greater Los Angeles region.

A Growing Coastal Destination

As other Southern California beach cities grow increasingly expensive, Long Beach stands out as an affordable and accessible alternative. Few cities along the Southern California coastline offer the same blend of affordability, opportunity, and coastal charm as Long Beach.