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