Los Angeles, CA Retail Market Report Q3 2026
Cap Rates Expand for 19 Quarters, Yet Completions Fall 42%
Demand
During Q3 2026, the Los Angeles market posted net absorption of -262K SF, against -621K SF in the same quarter last year. Vacancy is 5.8%, 15 bps tighter than Q3 2025. East Los Angeles/Outer SGV is both the tightest submarket at 0.0% vacancy and the rent growth leader at +0.7%. Trailing-12-month absorption of -72K SF compares with -2.09M SF a year earlier. Asking rent of $37.03/SF is down 0.8% year over year and 1.0% below the Q1 2026 peak of $37.42/SF. Vacancy sits 89 bps above the Q4 2022 low of 4.9%.
Supply
Los Angeles delivered 39K SF in Q3 and 334K SF over the trailing twelve months (-42% versus the prior TTM period). Space under construction equals 0.2% of inventory, concentrated in Beach Cities/Palos Verdes at 1.7% of its stock. Annual deliveries peaked at 6.55M SF in 2008. Q3 deliveries were less than half of last year’s 198K SF.
Investment Market
Transaction activity generated $4.7B in sales over the trailing twelve months, -2% against the prior TTM period; Q3 accounted for $1.18B. The high-water mark in this series is $6.8B in 2018.
Cap rates across Los Angeles average 5.94%, up for 19 straight quarters. Pricing sits at $442/SF, lower for 4 consecutive years. The cap rate is 68 bps above the Q4 2021 low of 5.26%.
Volume
- $4.7B TTM volume (-2% YoY)
- Q3 2026: $1.18B
- Series peak $6.8B (2018)
Pricing
- Cap rate 5.94%
- Price per SF $442
- Caps expanding 19 quarters running
