The commercial office market of 4 million square feet in Downtown Long Beach, especially Class B buildings, continues to face significant downward market pressures spurred by post COVID uncertainties and high vacancy which hit an all-time high of 29% at the end of 2023. These trends began in 2021. Repositioning of assets, adaptive re-use, innovative academic spaces and creative collaborative spaces for arts and entertainment is taking place.
But, prospects for Long Beach Downtown office will be bleak for Q1 and the remainder of the 2024 calendar year. Lease rates will continue to decline especially in the older Class B building category. New tenants and tenants willing to relocate to other buildings especially are taking advantage of the current market which will face additional pressure through 2024. There are a couple Class B+ office building renovations such as 180 E Ocean, 200 Pine Ave. and 211 Ocean which are taking advantage of the “trade up & pair down” trend which will continue in 2024. This trend is positively affecting the 3 larger Class A projects Downtown but the World Trade Center and Landmark Square have a big hole they need to dig out of.
The additional 4 million square feet of office space in Suburban Long Beach tells a totally different story especially the near zero vacancy at Douglas Park adjacent to the Long Beach airport. As a whole this market is stable and hovering at 15% vacancy average overall.