Without better numbers, vacancy rates and net absorption in the third quarter of 2026 for Southern California commercial real estate spell trouble while an official recession remains undeclared, much like during the Vietnam conflict.
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The Southern California (SoCal) commercial property market struggles to recover from economic, trade and geopolitical uncertainties that make long-term leasing decisions less attractive for qualified tenants, leaving commercial property languishing — but there are some areas of improvement.
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Commercial landlords and tenants agreeing to partial payments use RPI Form 558, and residential landlords and tenants use RPI Form 559. The forms commit to writing the portion of remaining delinquent rent the tenant owes the landlord, the date the balance is due, and when not paid by the due date, what action the landlord may take to enforce payment.
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Vacancy rates are on a year-over-year upward incline, while net absorption returns were positive this quarter. New projects were opened to the market but are not yet occupied. A few major tenants are boosting occupancy of distribution space, while smaller businesses are slowly shutting down.
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Vacancy rates are up in all SoCal sectors and counties, aside from Orange County office and a slight year-over decrease for Los Angeles industrial. Net absorption remains negative for San Diego and Orange County but turned positive for Los Angeles and Inland Empire industrial in 2025.
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A commercial leasing agent and a landlord have several options for including addenda in a commercial lease agreement, including the Maintenance Modification Addendum, Alienation Addendum, Subordination Addendum and a lease agreement addendum with blank spaces.
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Density bonus laws enable developers to increase density beyond what local zoning regulations allow, while increasing the number of subsidy-free housing for low- and moderate-income households.
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Vacancy and net absorption rates for the Southern California commercial property market worsened for most sectors.
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A new law approaches the housing shortage from the intuitive angle of reducing local agency discretion — the red tape leash — for adapting vacant commercial structures for reuse as housing projects.
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Antitrust behavior in real estate is back in the news. This time, commercial real estate site CoStar is getting the antitrust treatment.
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A landlord, tenant, leasing agent or property manager when negotiating rent payments as a percentage of a non-residential tenant’s gross sales uses a Commercial Lease Agreement of the percentage variety to set the terms for a fixed-term tenancy or uses the month-to-month variety to prepare a Commercial Rental Agreement for a periodic tenancy.
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A landlord, tenant, leasing agent or property manager uses a Commercial Lease Agreement of the gross variety for projects with a single tenant or multiple tenants when the landlord retains the obligations to manage and pay for most or all property operating expenses such as property taxes, insurance and maintenance during the tenancy.
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A qualified commercial tenant receives tenant protections, including a longer period of time for notice of an increase in rent and termination of tenancy, more documentation in a change of building operating costs charged the tenant and translation requirements when negotiating a lease agreement.
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A landlord, tenant, leasing agent or property manager uses a Commercial Lease Agreement of the net variety for a single-user tenant to document the terms of the tenancy negotiated when the payment of most or all property operating expenses including property taxes, insurance and maintenance incurred during the tenancy is shifted to the tenant.
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The bullish market following the 2020 recession reversed track in 2022 and has fully collapsed — now the commercial market is nowhere near finding a bottom in tenant demand and vacancies.
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A landlord or property manager uses a Commercial Lease Agreement – Gross – Single Tenant to lease commercial property to a tenant for a fixed term.
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Use this firsttuesday FARM Letter in your marketing. To request a FARM letter topic, or to see a...
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SoCal’s commercial real estate market on entering 2025 is fully destabilized with industrial vacancy rates elevated across all SoCal markets and office vacancy rates even higher.
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The tenant representation agreement employing a broker to acquire a leasehold interest in a property is the leasing equivalent to the buyer representation agreement to acquire a fee interest.
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Commercial vacancy rates rose after 2023 and continue to rise in Southern California. While increasing vacancies cut into rental income and leasing fees, the absorption rate is worsening and shifting the source of leasing fees. Regions with the highest vacancy rates see the most occupancy of vacant space.
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