LA Retail Market Sees Leasing Plunge 24% as Junior Big Box Stores Close
Los Angeles County's retail market is facing headwinds, especially on the leasing front, according to a Colliers report.
Leasing activity declined 24% from last quarter to 1.2 million square feet, with single-tenant properties accounting for the largest share of activity at 44%. After briefly turning positive last quarter, net absorption reversed, with tenants returning 448,000 square feet of space to the market.
Vacancy followed suit, rising 16 basis points to 6.72% and effectively undoing the prior quarter's improvement.
Junior Big-Box Stores Closing
Gabe Kadosh, vice president in retail (Los Angeles) for Colliers, said that while vacancy has unsurprisingly spiked in the LA retail market, average asking rates are edging higher, an interesting trend.
"There has been a trend of junior box stores such as Rite Aid, Big Lots, JoAnn's, Party City, and others closing numerous stores, which has accounted for much of the increased vacancies, many of which are in single-tenant buildings," Kadosh said.
"Los Angeles has a lot of available retail, but not much high-quality retail. Low supply and high-quality retail are still leasing quickly at higher rents, contributing to higher average asking rates. The ultra-luxury retail category has seen significant decreases in vacancies and remains extremely sought after, with rental rates rising."
ROW DTLA Seeing Renewed Leasing
As retailers double down on experiential brick-and-mortar in 2026, LA's ROW DTLA is seeing renewed leasing activity and cultural momentum across its 32-acre Arts District campus.
In the past few months, the district has signed more than 7,000 square feet of new retail space, including independent fashion brands like Things Between, streetwear brand Neoity and Kyoto Kitchen.
ROW DTLA has also seen several pop-ups convert into brick-and-mortar spaces. These additions reinforce the district's role as a launchpad for brands entering brick-and-mortar or expanding into Los Angeles.
Experience is a key driver of leasing activity in the district of 40+ retailers and top restaurants, where brands seek high-impact activations that blend culture, community and commerce.
As 2026 unfolds, districts that combine leasing momentum with recurring experiential draw are attracting heightened interest from brands seeking community-driven expansion in gateway markets like Los Angeles.
Eon Lew, founder of District Realty Group, told GlobeSt.com that ROW DTLA stands out for its collection of beautifully restored 100+-year-old buildings that bring together independent, culturally relevant retailers, fostering meaningful co-tenancy and a strong, cohesive brand ecosystem.
"It's also more than a shopping destination - the mix of fashion, food, and programming creates a design-forward environment where people spend time, not just transact," Lew said.
"That drives discovery, repeat visits, and a highly culturally curious customer."
At the same time, the surrounding area continues to gain momentum with residential growth, an influx of creative offices and hospitality. Combined with the energy of the Arts District, that's creating a built-in audience and reinforcing ROW as one of LA's most popular retail hubs.
Source: GlobeSt/ALM