The Southern California commercial real estate landscape continues to evolve post-pandemic, revealing both resilience and challenges across sectors. While industrial and multifamily properties remain strong performers, office space continues to recalibrate, with retail and hospitality showing pockets of opportunity amid shifting consumer behavior.
What’s Performing — And What’s Not
Industrial real estate is still the standout sector, fueled by the ongoing expansion of e-commerce, supply chain optimization, and demand for last-mile distribution hubs. Vacancy rates remain low in many submarkets, and tenants are often competing for limited space in well-located logistics corridors.
Multifamily also continues to perform well, driven by housing shortages, high home prices, and steady demand for rental units. Class A apartments in desirable neighborhoods are especially competitive, with developers and investors still viewing this sector as a reliable long-term play.
On the flip side, office remains one of the most challenged segments of the market. Hybrid work models, rightsizing, and employee demand for flexibility have forced landlords and developers to rethink traditional office offerings.
Retail and hospitality are in a state of selective recovery. While destination retail and lifestyle centers are bouncing back with experiential concepts, legacy shopping centers and under-amenitized properties are still working to regain their footing. Hospitality is seeing momentum in high-demand leisure markets but remains tied to broader economic confidence and travel trends.
Reinventing the Office Experience
To attract and retain tenants in today’s environment, landlords and developers are elevating office properties far beyond just four walls. The most competitive office buildings are embracing Class A amenities — think gyms, rooftop decks, shared conference facilities, and wellness-focused upgrades — as well as dog-friendly policies and flexible space configurations.
Activated, walkable environments have become a key ingredient for tenant attraction. Markets like Century City, Culver City, and Playa Vista are leading examples of how mixed-use surroundings with high-end residential, retail, and dining options can fuel leasing activity and reduce vacancy.
In response to tenant needs, developers are also adjusting floorplates and creating modular layouts that support hybrid work and collaboration. For some tenants, a smaller, well-located office in an amenity-rich area is more desirable than a larger footprint in a less engaging setting.
The Bottom Line
Southern California’s commercial real estate market isn’t just bouncing back — it’s transforming. Success today hinges on adaptability, innovation, and a deep understanding of what tenants value most in a post-pandemic world. From industrial stability to office reinvention, investors and landlords who stay ahead of the curve are best positioned to capitalize on shifting demand.
Stay Informed and Proactive
At Peak Commercial, we are committed to keeping you informed about critical developments in the real estate sector. If you have questions about how these changes may impact your investments or need guidance on navigating the rebuilding process, contact us today to explore how we can support your real estate endeavors.
info@peakcommercial.com
(818) 836-6717
