2026 Office Space Market Outlook

Long Beach Office Market Report

Q2 2026 | Market Outlook & Leasing Trends

Market Snapshot

  • Downtown (CBD) Inventory: ~4.0M SF

  • Suburban Inventory: ~4.0M SF

  • CBD Vacancy: Mid-20% range (trending upward)

  • Suburban Vacancy: ~22%

  • Key Trend: Office inventory is contracting through conversion and redevelopment

Downtown Long Beach (CBD)

The Downtown Long Beach office market remains under pressure, with the market yet to clearly establish a floor.

Vacancy is in the mid-20% range and rising, while asking rents have held relatively flat. In practice, however, effective rents continue to decline as landlords rely more heavily on concessions to attract tenants.

Leasing activity is being constrained by a lack of move-in ready space. Many landlords are unwilling to fund tenant improvements at today’s elevated construction costs, creating a gap between available space and tenant demand.

The “flight to quality” trend has largely played out, with incremental continuation, as most tenants have already upgraded and downsized.

A notable transaction this quarter was the sale of Landmark Square (460,000 SF) for approximately $50 million (~$108/SF), a roughly 63% discount. The buyer, Shomof Group, plans to convert the asset to residential—further evidence that obsolete office product is being removed from the market.

While the 2028 Summer Olympics will bring increased visibility to Long Beach, it is unlikely to materially impact near-term office fundamentals.

Suburban Long Beach

The suburban office market remains relatively stable, but not immune to broader pressures.

Vacancy is approximately 22%, still elevated by historical standards, though demand continues to hold in stronger submarkets. Areas such as Douglas Park remain highly occupied (95%+), while Bixby Knolls is tracking near 18% vacancy.

As in the CBD, limited turnkey space and high tenant improvement costs (approaching $120/RSF for Class A) are slowing deal velocity.

At the same time, the Pacific Coast Highway corridor is undergoing a significant shift. Recent and planned projects are removing office inventory, including:

  • ~150,000 SF of office demolition for residential development

  • Conversion of Park Tower (~120,000 SF) to student housing

  • Prior removal of Congressional Place (~74,000 SF)

These projects total approximately 350,000–370,000 SF of office space being removed from the market.

Outlook

The Long Beach office market is increasingly defined by divergence between Downtown and suburban submarkets.

  • Downtown faces continued pressure from elevated vacancy and weak demand
  • Suburban markets remain comparatively stable, supported by location and functionality

At the same time, office-to-residential conversions are beginning to materially reduce supply, particularly in coastal and infill locations. If sustained, this trend may serve as a rebalancing mechanism over the medium term.

 

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.