2026 Office Space Market Outlook

Long Beach Office Market Report

Q2 2026 | Market Outlook & Leasing Trends

This report reflects active leasing conversations, transaction activity, and on-the-ground market conditions across Long Beach, providing tenants with a practical view of current dynamics—not just headline statistics.

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

👉 What this means:
The market is not simply weakening—it is restructuring. While vacancy remains elevated today, the ongoing removal of office inventory is setting up a potential rebalancing over time, particularly for well-located assets.

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.

👉 Tenant takeaway:
This is a tenant-favorable environment, but one that requires negotiation discipline. The gap between asking and effective rents is significant, and well-advised tenants can secure materially better terms than headline pricing suggests.

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.

👉 Key constraint (often overlooked):
Even in a soft market, execution risk has increased. Tenants should expect longer timelines and fewer turnkey options, particularly for larger or more customized spaces.

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

👉 Implication:
The next phase of the market is less about upgrading and more about right-sizing and cost control, with fewer tenants actively driving premium space demand.

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.

👉 What this signals:
This is not an isolated event—it reflects a broader trend where obsolete office product is being repriced and removed from inventory.
Over time, this process is likely to tighten supply, but in the near term it reinforces pricing pressure on remaining assets.

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

👉 Reality check:
Macro visibility does not translate into immediate office demand. Leasing fundamentals will continue to be driven by local occupancy needs and cost considerations, not external events.

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.

  • Douglas Park: ~95%+ occupied
  • Bixby Knolls: ~18% vacancy

👉 Key distinction:
Unlike Downtown, suburban markets are functionally driven—tenants are choosing these locations for access, parking, and usability, which continues to support baseline demand.

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

👉 Implication for tenants:
Even in more stable submarkets, cost to occupy—not just rent—is a critical factor. Deals are being delayed or restructured based on total build-out economics.

At the same time, the Pacific Coast Highway corridor is undergoing a significant shift. Projects are actively 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)

Total: ~350,000–370,000 SF removed from the market

👉 What this means:
Suburban Long Beach is not just stable—it is tightening structurally. As inventory is reduced, well-located suburban assets may benefit first from any future demand recovery.

Outlook

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

  • Downtown: structurally challenged, with elevated vacancy and ongoing repricing
  • Suburban markets: functionally viable, supported by usability and location

At the same time, office-to-residential conversions are beginning to materially reduce supply, particularly in coastal and infill locations.

👉 Forward implication:
If this trend continues, the market may begin to rebalance from the supply side rather than demand growth—a slower but more durable recovery mechanism.

Bottom Line

  • The market remains tenant-favorable today, particularly in Downtown
  • Execution complexity has increased, especially around build-out and timing
  • Suburban markets are likely to outperform due to functionality and limited new supply
  • Inventory reduction is the most important long-term trend to watch

Long Beach Office Space Market and City Overview

Long Beach: A Market That Defies Simple Definition

Long Beach doesn’t fit neatly into a single category—and that’s exactly what makes it compelling. It combines the infrastructure and scale of an industrial port city with the lifestyle appeal of a Southern California coastal market. From oceanfront areas like Alamitos Bay—consistently rated among the cleanest in the region—to a wide range of established retail and business districts, Long Beach offers a level of diversity that few coastal cities can match.

A Market of Distinct Submarkets

Rather than functioning as one centralized district, Long Beach operates as a collection of strong, independent submarkets.

Neighborhoods like Belmont Shore and 2nd & PCH deliver a classic coastal retail and dining environment, while areas such as Retro Row, the East Village Arts District, and Bixby Knolls offer more local, design-driven, and community-oriented business environments. Douglas Park, including LBX and The Hangar, reflects a newer, master-planned approach with a mix of office, retail, and experiential uses.

This distribution of activity allows businesses to choose locations that align closely with their brand, workforce, and customer base—something that is harder to achieve in more centralized markets.

Evolving Urban Core, Strength in the Surrounding Market

Downtown Long Beach has experienced cycles of change, as many urban cores have. However, significant residential development has reshaped the area, bringing a large and growing population base that supports long-term demand for retail, services, and office space.

At the same time, many of Long Beach’s strongest business environments are found outside the traditional downtown core. Suburban office corridors and neighborhood retail districts have remained active and resilient, offering practical alternatives for tenants seeking accessibility, parking, and proximity to residential communities.

A Market That Has Gained Institutional Attention

Long Beach was historically overlooked by larger institutional investors, often viewed as secondary to other Southern California coastal markets. That perception has shifted.

Sustained residential development, combined with increasing retail activity and improving infrastructure, has drawn attention from well-capitalized developers and long-term investors. The result is a market that continues to see reinvestment and redevelopment across multiple submarkets—not just in a single concentrated area.

Relative Affordability Along the Coast

As coastal markets throughout Southern California have become increasingly expensive, Long Beach stands out as a more accessible alternative. It offers proximity to major employment centers, port-driven economic activity, and a coastal lifestyle—without the pricing barriers seen in neighboring beach cities.

For businesses, this creates an opportunity: access to a large and diverse customer base, a growing residential population, and a variety of location types, all within a more flexible cost structure.

A Practical Advantage for Tenants

What ultimately defines Long Beach is optionality.

Tenants are not limited to a single business district or price tier. They can choose between urban, coastal, and suburban environments within the same city—each with distinct advantages depending on their needs.

That flexibility, combined with ongoing investment and a broad economic base, continues to position Long Beach as a durable and often underappreciated commercial real estate market within the Greater Los Angeles region.