Los Angeles is not just another office market. It is the global headquarters of the entertainment industry, a hub for tech and media startups, and a city where "creative office" is not a marketing buzzword but a genuine property category that commands premium rents. The LA office landscape in 2025 tells a story of sharp contrasts: creative campuses on the Westside are attracting major tenants at record rents, while Downtown LA towers sit at 33.3% vacancy. For borrowers seeking office building loans in Los Angeles, these dynamics create both significant risk and compelling opportunity. The key to successful financing lies in understanding which submarkets, property types, and tenant profiles lenders favor in this bifurcated market.
Clear House Lending provides office property financing across the greater Los Angeles metro, from bridge loans for value-add repositioning to permanent financing for stabilized creative campuses. This guide covers the current LA office market, loan programs available, rates and terms, and financing strategies tailored to the unique characteristics of the Los Angeles office ecosystem, whether you are acquiring a Westside creative campus, stabilizing a Downtown tower, or financing a medical office building in the San Fernando Valley.
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What Does the Los Angeles Office Market Look Like in 2025?
The Los Angeles office market in 2025 is defined by a deep split between premium creative product and traditional commodity space. Overall vacancy across the metro stands at approximately 24.5%, up 150 basis points year-over-year, making it one of the softer major office markets in the country. But that headline number obscures enormous variation by submarket, building type, and tenant profile.
Downtown LA has been hit hardest, with overall vacancy surpassing 31% and availability reaching 36.8% as of Q3 2025. The Financial District and Bunker Hill, once anchored by law firms and financial institutions, have seen tenants downsize or relocate to the Westside. Net absorption remained negative in 2025, though the rate of decline slowed, with a 42,530 square foot improvement over 2024 suggesting early signs of stabilization.
The Westside tells a different story entirely. West Los Angeles, including Santa Monica, Culver City, Century City, and Playa Vista, has bounced back faster than any other submarket in the county. Large, flexible creative campuses are commanding rents that rival or exceed pre-pandemic levels. Century City is attracting significant investment, highlighted by CAA's announcement that it will become the flagship tenant of a planned 37-story tower in 2026.
For borrowers and lenders alike, the practical implication is clear: a creative campus in Culver City and a Class B tower in Downtown LA are evaluated as fundamentally different asset types, with loan terms, rates, and leverage varying dramatically between them.
How Does the Entertainment Industry Shape LA Office Demand?
No discussion of Los Angeles office financing is complete without understanding the entertainment industry's outsized influence on the market. Film, television, streaming, gaming, and related media companies are the dominant demand drivers for premium office space across the metro.
The entertainment sector's impact extends well beyond the major studios. Production companies, talent agencies, post-production houses, visual effects studios, and music labels all require specialized office space that blends traditional work environments with creative and production-adjacent facilities. This demand creates a distinct property category, often called "studio-adjacent office" or "creative office," that commands rents 20% to 40% above comparable traditional office space.
The post-strike recovery in 2025 has been a significant factor. After the 2023 WGA and SAG-AFTRA strikes caused production shutdowns that rippled through the entire entertainment ecosystem, production volume has rebounded strongly. Studios and production companies that deferred expansion during the strikes have returned to the market, and several major streaming platforms have expanded their LA footprints.
Worthe Real Estate Group, one of LA's largest office landlords with 5.2 million square feet across 21 buildings, exemplifies the entertainment-office connection. Their portfolio includes the 800,000 square foot Second Century building in Burbank, fully leased by Warner Bros., and the 27-acre Burbank Studios acquired through a joint venture. This concentration of entertainment tenancy demonstrates the sector's willingness to commit to long-term, large-format leases that lenders find highly attractive.
The Arts District has emerged as another entertainment-office hotspot, with former warehouses being repurposed into contemporary creative offices. Spotify, Warner Music Group, and Honey (now part of PayPal) have all signed leases exceeding 100,000 square feet in the area, signaling institutional confidence in non-traditional office formats.
What Are Current Office Loan Rates in Los Angeles?
As of early 2026, office building loan rates in Los Angeles span a wide range depending on property quality, submarket, and loan structure. California commercial mortgage rates start as low as 5.11% for the most qualified borrowers with stabilized, well-located assets.
For stabilized Class A and creative office buildings with strong tenancy, conventional commercial mortgage rates range from 5.11% to 6.75%. CMBS loans for larger office properties typically price in the 5.50% to 7.25% range, with rates on the lower end for premium Westside properties and the higher end for Downtown LA towers with elevated vacancy risk. Bank loans for relationship borrowers with strong portfolios can be competitive with CMBS pricing, particularly for smaller deals under $10 million.
Bridge loans for office repositioning and lease-up projects range from 7.50% to 10.50%, reflecting the additional risk lenders take on transitional assets. These programs are popular in the current LA market where value-add opportunities abound in the form of older buildings that can be repositioned as creative office space. For more on bridge financing, see our commercial bridge loan guide.
SBA loans remain an attractive option for owner-occupants of smaller office and medical office buildings. SBA 7(a) rates range from 6.50% to 8.00%, while SBA 504 loans offer fixed rates starting around 5.64% through the CDC debenture portion. These programs are particularly well-suited for medical practices, production companies, and professional services firms purchasing their own space. Learn more in our guide to SBA loans for commercial real estate.
Loan-to-value ratios for LA office properties currently range from 55% to 70%, with the higher end reserved for stabilized creative campuses and medical office buildings with long-term tenants. Traditional office buildings in submarkets with elevated vacancy may see LTV capped at 55% to 60%, reflecting lender caution around cash flow stability.
Use our commercial mortgage calculator to estimate monthly payments, or our DSCR calculator to assess whether your property's income supports financing at current rates.
How Do Westside, Downtown, and Valley Office Submarkets Compare?
Los Angeles is a vast metro with office submarkets that function almost as separate markets, each with distinct tenant profiles, rent levels, vacancy rates, and lender appetite.
Westside (Santa Monica, Century City, Culver City, Playa Vista, West Hollywood): The Westside is the strongest office submarket in Los Angeles and among the most desirable in the country. Creative campuses and entertainment-adjacent properties command rents of $5.50 to $8.50 per square foot per month (full service), with trophy properties pushing even higher. Tech companies, streaming platforms, talent agencies, and production companies anchor the tenant base. Vacancy in the best Westside buildings runs well below the metro average, and lender appetite for well-located Westside office is strong. The combination of entertainment industry demand, limited new supply, and walkable urban environments has insulated this submarket from the worst of the office downturn.
Downtown LA (Financial District, Bunker Hill, Arts District, South Park): DTLA presents the most challenging financing environment in the metro, with vacancy above 31% and availability approaching 37%. The tenant base has shifted as law firms and financial institutions have downsized or relocated. However, the Arts District offers a counterpoint, with creative office conversions attracting media and tech tenants at rents well above the Financial District average. The city's expanded Adaptive Reuse Ordinance, which now includes buildings constructed as recently as 15 years ago, has opened new pathways for converting obsolete office towers to residential use. Lenders evaluating DTLA office are highly selective, favoring either stabilized buildings with committed tenancy or conversion projects with experienced sponsors.
San Fernando Valley (Burbank, Glendale, Woodland Hills, Sherman Oaks): The Valley office market benefits enormously from its concentration of entertainment industry tenants, particularly in the Burbank media corridor. Warner Bros., Disney, and Netflix (which leases significant space in Burbank) provide a stable demand base that insulates this submarket from broader office market weakness. Rents are more moderate than the Westside at $3.50 to $5.00 per square foot per month, making the Valley attractive for cost-conscious entertainment and professional services firms. Lender appetite is moderate to strong, particularly for properties with entertainment tenancy.
Mid-Wilshire and Hollywood: This corridor benefits from proximity to both entertainment studios and the Westside, with rents typically running $3.75 to $5.50 per square foot per month. Sunset Studios and related production facilities in Hollywood drive demand for nearby office space. Medical office buildings along the Wilshire corridor, anchored by Cedars-Sinai and other healthcare institutions, represent a distinct and highly financeable submarket.
South Bay and LAX Corridor (El Segundo, Manhattan Beach, Hawthorne): The aerospace and defense sector drives office demand in the South Bay, with Northrop Grumman, Raytheon, and SpaceX maintaining significant operations. Rents are moderate at $3.25 to $4.75 per square foot per month, and the tenant base tends toward longer lease terms than creative office, which lenders favor.
What Types of LA Office Buildings Are Most Financeable?
Lenders evaluating Los Angeles office loans apply different standards depending on the property type, and understanding these distinctions is essential to securing favorable terms.
Creative Office and Studio-Adjacent Space: These properties are the crown jewels of the LA office lending market. Buildings with open floor plans, high ceilings, indoor-outdoor design elements, and proximity to production facilities command premium rents and attract credit entertainment tenants. Lenders recognize the strong demand dynamics and will often underwrite creative office more aggressively than traditional office, offering LTV up to 65-70% and rates comparable to Class A traditional office in other markets. The recently completed Habitat building, a 253,000 square foot creative office property featuring operable NanaWalls and outdoor terraces, exemplifies the product type that lenders favor.
Medical Office Buildings: Healthcare-anchored office properties represent a consistently strong lending category. Medical tenants invest heavily in tenant improvements (often $80 to $150 per square foot), sign longer leases (7 to 15 years), and demonstrate lower default rates than general office tenants. Lenders typically price medical office loans 25 to 50 basis points below comparable general office, with LTV reaching 70% or higher for well-located properties with strong healthcare anchor tenants.
Class A Traditional Office: Stabilized Class A buildings with credit tenants on long-term leases remain financeable at competitive terms, though lenders are more selective than in prior cycles. Buildings in strong submarkets with vacancy below the metro average can access conventional financing at 60-65% LTV and rates in the mid-5% to mid-6% range.
Class B Repositioning Candidates: The current market creates significant opportunity for investors who can acquire Class B buildings at a discount and reposition them as creative office or mixed-use. Bridge financing at 65-75% of purchase price (or 80% of cost including renovation) provides the capital to execute these strategies. The exit plan, whether refinance into permanent debt or sale to a long-term holder, is the critical underwriting factor.
Class C and Conversion Candidates: Similar to other major markets, Class C commodity office in LA faces the most difficult financing environment. However, LA's Adaptive Reuse Ordinance creates a viable conversion pathway that lenders will finance when the sponsor has relevant experience and the building's floor plate supports residential or mixed-use conversion.
How Does the 2028 Olympics Affect LA Office Investment?
The 2028 Summer Olympics in Los Angeles represent a significant catalyst for commercial real estate investment across the metro, and the effects are already being felt in the office market.
Infrastructure improvements associated with the Olympics, including transit expansion, road improvements, and neighborhood revitalization around Olympic venues, are enhancing the accessibility and desirability of several office submarkets. Properties near Olympic venues that have invested in modern amenities are expected to see increased demand starting as early as 2026 as corporate sponsors, media organizations, and support services begin establishing their LA operations.
The hospitality and tourism surge expected around the Games will drive demand for temporary office space, event planning offices, and media centers. Property owners positioned with flexible office configurations and short-term lease structures may benefit from premium rents during the Olympic period.
For office investors, the Olympics create both a demand catalyst and a valuation floor in certain submarkets. Properties in Downtown LA, the South Bay near SoFi Stadium, and along major transit corridors stand to benefit most directly. Lenders are beginning to factor Olympic-related demand into their underwriting for properties in affected areas, though the extent of this premium varies by lender.
The broader signal is one of confidence in LA's long-term trajectory. International attention, infrastructure investment, and corporate commitment to the city reinforce the thesis that LA office fundamentals will improve over the medium term, even as the current market faces headwinds from elevated vacancy.
What Is the Adaptive Reuse Opportunity for LA Office Buildings?
Los Angeles has been a national leader in office-to-residential conversion, and recent policy changes have dramatically expanded the opportunity set. The city's expanded Adaptive Reuse Ordinance now includes buildings constructed as recently as 15 years ago, removes minimum unit size requirements, and expedites the approval process.
This policy shift is particularly relevant for Downtown LA, where vacancy exceeds 31% and dozens of office buildings are functionally obsolete for modern office use. Buildings constructed before 1980 with floor plates under 15,000 square feet are the strongest conversion candidates, as the narrower floor plates allow natural light to reach residential units.
The financing path for adaptive reuse typically follows a staged approach. An acquisition loan or bridge loan funds the initial purchase, often at a significant discount to the building's prior office valuation. Construction financing covers the renovation costs, which range from $250 to $450 per square foot in LA depending on the scope of work and finish level. Upon completion and stabilization, permanent financing or a sale provides the exit.
Lenders evaluating conversion projects in LA focus on several key factors: the sponsor's track record with similar projects, the feasibility of the floor plate for residential use, compliance with the Adaptive Reuse Ordinance, projected residential rents relative to total development cost, and the strength of the residential market in the target neighborhood.
For investors considering adaptive reuse of an LA office building, contact our team to discuss financing structures that accommodate the multi-phase nature of these projects.
What Financing Strategies Work Best for LA Office Investors?
The optimal financing strategy for a Los Angeles office property depends on the property type, submarket, and your investment thesis.
Stabilized Creative Campus or Class A Acquisition: For well-leased creative or Class A office properties on the Westside or in entertainment corridors, a conventional commercial mortgage or CMBS loan at 60-65% LTV provides the most favorable rate and longest term. Expect rates in the 5.11% to 6.75% range with 5 to 10 year fixed-rate periods. These loans work best when the weighted average lease term exceeds the loan term and the tenant base includes credit entertainment, tech, or professional services firms.
Value-Add Repositioning: Los Angeles offers abundant opportunity to acquire underperforming office buildings and reposition them as creative office, medical office, or mixed-use. A bridge loan provides the flexibility to execute your business plan, with terms of 12 to 36 months at 7.50% to 10.50%. Once the property is stabilized at higher rents, you can refinance into permanent financing at significantly lower rates.
Medical Office Acquisition: LA's enormous healthcare sector, anchored by Cedars-Sinai, UCLA Health, Kaiser Permanente, and dozens of smaller systems, creates consistent demand for medical office space. Properties with long-term healthcare tenants can qualify for conventional financing at premium terms, with LTV reaching 70% and rates 25 to 50 basis points below general office. SBA 504 loans are particularly attractive for physician groups purchasing their own practice space.
Adaptive Reuse and Conversion: For DTLA office buildings suitable for residential conversion, a combination of bridge acquisition financing and construction financing provides the necessary capital. The expanded Adaptive Reuse Ordinance and chronic housing shortage create a favorable backdrop for well-conceived projects. Expect total development costs of $250 to $450 per square foot and a project timeline of 18 to 36 months from acquisition to stabilization.
Owner-Occupied Office: Production companies, professional services firms, and medical practices purchasing their own office space should strongly consider SBA loan programs. The ability to finance up to 90% of the purchase price with a down payment as low as 10% makes ownership accessible even in LA's more expensive submarkets.
Coworking and Flex Office: The coworking sector continues to expand in LA, driven by the entertainment industry's project-based workforce and the startup ecosystem. Buildings with a coworking component can attract financing if the operator has strong financials and the flex space represents a manageable portion of total building income. DSCR-based lending can be particularly effective for these properties when the borrower's personal income is not the primary qualification factor.
What Are Lenders Looking for in LA Office Loan Applications?
Underwriting standards for office loans in Los Angeles reflect both national tightening trends and local market conditions. Borrowers should be prepared for thorough evaluation across multiple dimensions.
Tenant Quality and Industry Exposure: Lenders place heavy emphasis on tenant creditworthiness, with particular attention to the entertainment industry's cyclical nature. A building leased to a major studio or streaming platform on a long-term lease is viewed very differently from one leased to small production companies on short-term deals. Lenders typically require financial statements from any tenant occupying more than 10% to 15% of building income.
Submarket and Location: In the current bifurcated market, location is perhaps the single most important underwriting variable. A Westside creative campus will receive materially better terms than an identical building in a struggling DTLA corridor. Lenders track submarket-level vacancy, absorption, and rent trends closely.
Debt Service Coverage Ratio: Lenders require a minimum DSCR of 1.25x for most office loans, with many preferring 1.30x to 1.35x in the current environment. For office buildings in submarkets with elevated vacancy risk, some lenders require 1.35x or higher to create a buffer against potential income loss. Use our DSCR calculator to test whether your property qualifies.
Building Quality and Capital Needs: California's Title 24 energy requirements, seismic retrofit obligations, and general deferred maintenance all factor into lender evaluation. Properties requiring significant capital expenditure will face reduced loan proceeds or requirements for funded reserves.
Sponsor Experience: Lender appetite for LA office loans increases significantly when the sponsor has a track record of successful office ownership and management in the Los Angeles market. Entertainment industry connections and tenant relationships are viewed as meaningful competitive advantages. First-time office investors may face higher rates, lower leverage, or requirements for additional guarantors.
How Do Seismic and Environmental Factors Affect LA Office Financing?
Los Angeles office buildings face seismic and environmental considerations that directly impact financing terms and availability.
Seismic risk assessment is a standard component of LA office loan underwriting. Buildings constructed before 1975 that have not been retrofitted may face requirements for seismic evaluation reports, and lenders may condition loan approval on retrofit commitments for non-ductile concrete and unreinforced masonry structures. The city's mandatory retrofit ordinance for soft-story buildings has addressed the most vulnerable structures, but older concrete-frame office buildings may still require seismic upgrades that add $15 to $40 per square foot to total project costs.
California's Title 24 energy standards are among the most stringent in the nation and affect both new construction and major renovations. Compliance with current energy codes can add 5% to 10% to renovation costs but also positions the building for higher rents and more favorable financing terms. Lenders increasingly view energy efficiency as a proxy for building quality and long-term competitiveness.
Wildfire risk, while primarily associated with hillside residential properties, has become a consideration for office buildings in certain foothill communities in the San Fernando Valley and along the urban-wildland interface. Insurance costs for properties in elevated fire zones have increased substantially, and lenders evaluate insurance availability and cost as part of their underwriting.
Air quality and environmental remediation are also factors for certain LA office properties, particularly those in formerly industrial areas like the Arts District or along major transportation corridors. Phase I and Phase II environmental assessments are standard requirements, and properties with remediation needs will face additional lender scrutiny.
Ready to explore financing for your LA office property? Contact Clear House Lending to discuss your options with an experienced commercial loan advisor who understands the nuances of the Los Angeles office market.
Frequently Asked Questions
What is the minimum down payment for an office building loan in Los Angeles?
The minimum down payment depends on the loan program and property type. For owner-occupied office buildings, SBA loans allow down payments as low as 10%. Conventional commercial mortgages for investment office properties typically require 30% to 45% down in the current market, with higher leverage available for stabilized creative campuses and medical office buildings with long-term tenants. The strongest terms go to Westside and entertainment-corridor properties with credit tenancy.
Can I get financing for a Downtown LA office building with high vacancy?
Yes, but the terms will reflect the risk. For DTLA office buildings with vacancy above 25%, traditional permanent financing will be difficult to secure at favorable terms. Bridge loans at 60-70% of current value with rates of 8.50% to 10.50% are the most likely path, with the business plan (lease-up, repositioning, or conversion) serving as the primary underwriting factor. If the building is a candidate for adaptive reuse conversion to residential, lenders with conversion experience may offer more favorable terms based on the projected residential value.
How do lenders evaluate creative office space differently from traditional office?
Lenders recognize that creative office in Los Angeles commands premium rents and attracts a different tenant profile than traditional office. Key evaluation factors include the quality and durability of the creative design elements, the tenant mix (entertainment and tech tenants are viewed favorably), lease structures (creative tenants sometimes prefer shorter terms), and the submarket's creative office demand dynamics. Well-located creative office with entertainment anchor tenants can receive terms comparable to Class A traditional office in other markets.
What impact does the 2028 Olympics have on office loan underwriting?
The Olympics are beginning to influence lender sentiment for properties in affected areas, though the impact is not yet uniformly reflected in underwriting. Properties near Olympic venues, along transit corridors being improved for the Games, and in neighborhoods benefiting from associated infrastructure investment may receive modestly more favorable treatment. The larger impact is on long-term valuation assumptions, where the Olympics reinforce confidence in LA's trajectory and support more optimistic exit valuations for bridge and construction loans.
Are SBA loans available for entertainment and production company offices?
Yes. SBA 7(a) and 504 loans are available for production companies, talent agencies, post-production houses, and other entertainment businesses purchasing their own office space. The SBA 504 program is particularly attractive, offering fixed rates starting around 5.64% with up to 90% financing. The key requirement is that the business must occupy at least 51% of the building. For entertainment companies with fluctuating revenue, SBA lenders will evaluate business financials over a multi-year period to account for industry cyclicality.
How long does it take to close an office building loan in Los Angeles?
Timelines vary by loan type. CMBS loans for larger office properties typically close in 60 to 90 days. Conventional bank loans close in 45 to 60 days. Bridge loans can close in 14 to 30 days, making them ideal for competitive acquisition situations. SBA loans generally require 60 to 90 days due to additional government underwriting requirements. For time-sensitive deals, explore our bridge loan programs designed for rapid execution.
For more on commercial real estate financing in Los Angeles across all property types, visit our comprehensive LA commercial loans guide.
Take the next step in your Los Angeles office investment. Contact Clear House Lending today for a free consultation and customized rate quote for your office property.