Office vacancy tightened in more than half of major U.S. markets in the second quarter. Los Angeles went the other way: 25.8% and climbing, with Downtown at a brutal 35.3%.
Bisnow covered the split this week, and CBRE Vice Chair Jeff Pion named the cause: “We are a market that thrives on creativity. The entertainment industry, technology, media… that is probably the reason that we have been slower to recover versus places like New York and Dallas and other markets that have a propensity of financial institutions.”
Read it again. The tenants who won’t come back are creative. The tenants filling buildings are finance and law. Century City, stacked with law firms and financial services, sits at 23% vacancy and landed three of LA’s ten biggest leases last quarter, including PwC’s 138K SF deal at 2121 Avenue of the Stars. West LA took 38.4% of all regional leasing while the rest of the city bled 432K SF of negative absorption.
The standard explanation is culture. Banks mandate five days, studios don’t. Fine. But I think something more physical is going on.
WHAT’S ACTUALLY HAPPENING
Picture a law firm’s floor. Walls. Doors. Offices where you can take a confidential call without performing it for forty colleagues. Now picture the creative office LA spent two decades perfecting: the open-plan loft, exposed ceilings, communal tables, not a door in sight. The open plan was sold as collaboration. It was mostly a density play with better branding.
Then everyone got a home office, and the comparison shopping started.
Leesman’s post-pandemic research, more than a million workplace responses, shows exactly which activities home wins: private conversations by 33 points, confidential work by 29, phone calls by 25, thinking by 21. Every single one requires a door. And when employees are asked why they work remotely, 45% name ease of concentration as the top reason. Not the commute. Concentration.
So the offices that kept their walls kept their tenants’ work. The offices that tore the walls out handed their most valuable hours to the kitchen table. The industries now refusing to return are, not coincidentally, the ones that went all-in on open plan.
Our portfolio data shows the same demand playing out inside buildings. From May to July, quiet space bookings across our portfolio grew roughly 40%. Bookings for open desks went the other way, falling to almost nothing this month. Conference rooms didn’t move all quarter. When tenants do come in, they aren’t reserving a seat in the noise. They’re reserving the one thing the open plan deleted: a room with a door.
WHY IT MATTERS
“Flight to quality” usually gets scored in lobby marble and rooftop bars. The LA numbers suggest quality means something plainer: can people do their actual jobs in your building? Finance and law tenants can. Their space supports the work. Creative tenants in open lofts are being asked to commute to a place that’s worse for concentration than their bedroom, and they’re responding rationally.
That reframes the amenity arms race. A tenant whose people can’t focus won’t be saved by a golf simulator. The building isn’t losing to the competitor across the street. It’s losing to a door that closes, forty minutes away.
WHAT TO DO
Audit your floors for focus capacity, not just density. Count the rooms where one person can work or talk privately, then compare that to what your tenants’ work actually requires.
If you hold creative-heavy space, reposition around privacy, not ping-pong. Bookable quiet rooms, phone rooms, small private offices. Then measure. Our quiet-space demand moved 40% in a single quarter. This shows up in booking data fast, and it’s a cheaper fix than a lobby renovation.
And if you’re underwriting a market, look at the tenant mix through this lens. The recovery isn’t sorting cities. It’s sorting floor plans.
LA doesn’t have a return-to-office problem. It has an open-plan problem. The tenants who came back are the ones who never tore the walls out.
