Demand for office space in Downtown Long Beach office has remained relatively stable, despite a year when many companies moved to remote work to keep COVID-19 from spreading, according to a study conducted by the Downtown Long Beach Alliance.
The vacancy rate for office space was up only slightly from pre-pandemic times, according to data collected by CoStar, a leading provider of real estate data and analytics.
In the first quarter of 2020—the last three months before the coronavirus pandemic took hold in the U.S.—the vacancy rate for office space in Downtown Long Beach was 16%, a rate that remained nearly unchanged in the second quarter, despite pandemic restrictions.
Since then, the vacancy rate has climbed to 19%.
These fluctuations, however, are in line with previous years. In 2019, the vacancy rate for office space in Downtown Long Beach was 18%, in 2018 it was 15.6%, according to CoStar.
And demand for office space appears to be growing again, with a net of 35,619 square feet of office space becoming occupied in the past quarter.
Rents have increased 1.65%, approaching pre-pandemic levels, with an average rent of $2.47 per square foot. This places Long Beach at a moderate level of of rent growth compared to other cities in the Orange County and LA metropolitan area, which have seen rents drop by as much as 9% (Downtown Santa Monica) and rise by as much as 8% (Torrance) over the past 12 months.
Weekly office occupancy in the LA metro area, gathered from key-swipe data analyzed by security company Kastle Systems, has been increasing again since December, while remaining at a relatively low level of 25%.
It’s unclear whether offices will return to full occupancy anytime soon. Responding to a DLBA survey, 42% of employers said they will be using a hybrid remote/in-office model moving forward, compared to 33% who said they were planning to return to full, pre-pandemic occupancy.
While some workers might not be returning to the office right away, they are returning to the workforce. Labor force participation in Long Beach has increased significantly since last year, almost reaching pre-pandemic levels, with 240,000 people 16 or older actively employed or looking for work.