As we move into the final quarter of 2025, the retail landscape in the Los Angeles metropolitan area continues to evolve in interesting — and in some cases challenging — ways. In this blog-post I’ll walk you through the key trends, underlying drivers, and what it all means for retailers (and retail watchers) in this market.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Current Market Snapshot

 

Here are some of the headline numbers for LA retail in 2025, which set the backdrop for all the finer trends:

 

● According to a Q1 2025 report, the availability rate for retail space in LA was 6.1%, up about 0.2 percentage points from Q4 2024.

 

● For Q3 2025, one report noted the vacancy rate at around 6.0%, and asking rents averaging about $36.50 per sf (with year-over-year rent growth of –1.2%).

 

● Another Q3 2025 snapshot: under construction roughly 598,000 sf, sales volume approx $556 million in that quarter.

 

The market is showing modest softening in asking rents, moderate vacancy, and some construction activity — but also divergence between well-located “top tier” retail vs older/obsolescent space. The $36.50/­sf is still quite high compared to many U.S. markets, which speaks to LA’s premium pricing for good locations.

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Key Trends & Themes

 

Premium Locations Hold Up, Older Space Struggles

Prime retail corridors (think high foot-traffic, transit-adjacent, coastal/suburban nodes) continue to attract demand and maintain pricing discipline. But older, less well-located retail centres are starting to show more softness: weaker absorption, more concessions, higher availability.

 

This means that for a retailer or investor, location quality and tenant mix matter more than ever: an A-site may still command strong terms, while a C- or B-site will face headwinds.

 

Shift Toward Experiential / Lifestyle Retail

While “pure” retail (i.e., commodity goods) is under pressure, there’s a growing emphasis on experience, community, mixed-use, lifestyle-oriented retail. For example, newer shopping-centres in LA are being designed with more dining, entertainment, outdoor space, and integration with residential or transit.

Retailers and landlords are increasingly thinking: “How can this space offer something beyond just shelf-space?” — whether that’s a coffee bar, an event space, or an interactive element.

 

Consumer Behaviour & Structural Shifts

Beyond real estate metrics, retail is being shaped by consumer trends: growth of online shopping, omnichannel strategies, demand for convenience, and footprint optimization. In LA, given the traffic/parking/real-estate cost constraints, retailers need to think creatively about how to use their physical stores not just as “warehouses for goods” but as brand experience hubs, fulfillment nodes, or community anchors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Strategic Take-Aways for Retailers & Landlords

 

Here are some practical implications if you’re a retailer (tenant) or a landlord/owner in the LA market:

 

For Retailers / Tenants

 

● Prioritize location quality: Foot-traffic, accessibility, visibility, and synergy with adjacent uses matter more than ever.

 

● Lean into experience: If you’re opening a store, think about how the physical space complements online, offers something compelling, and draws people in (events, community, brand engagement).

 

● Optimize footprint: Given high rental rates and slower absorption in weaker nodes, consider smaller footprint + higher productivity or omnichannel integration (buy-online-pick-up-in-store, showrooming, etc).

 

For Landlords / Investors

 

● Focus on quality portfolio: Assets with strong location, modern condition, tenant mix, and potential for mixed-use upside are commanding premium interest.

 

● Be realistic on older centres: If you own dated B- or C- products, plan for repositioning or redevelopment rather than expecting “business as usual.”

 

● Explore mixed-use redevelopment: Given redevelopment pressure and land value, converting or adding residential/office over retail may unlock value.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Outlook for the Rest of 2025 & Into 2026

 

Looking ahead, a few things to keep an eye on:

 

● Rent & Vacancy Stability: The relatively modest increases in vacancy and small declines in asking rents suggest the market is holding up — but it’s not booming. If consumer spending dips, or supply increases, pressure could increase.

 

● Redevelopement: As older retail gets repurposed, we’ll likely see more mixed-use projects, smaller-format stores, and adaptive reuse of big-boxes.

 

● Tenant Mix Evolution: We may see more “destination” retailers, F&B/entertainment, and lifestyle uses in retail centres versus purely commodity retail.

 

● Technology & Fulfillment Interplay: Back-of-house logistics, local fulfillment hubs, click-and-collect, and omni-channel models will become more important — even for physical retail storefronts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5. "Hotspots" in LA Retail

 

Here are a few areas in Los Angeles worth watching for retail investment or store-rollout:

 

● Transit-Adjacent Corridors: Areas where new housing/office development is happening and which have good transit links. These tend to attract younger shoppers and higher dwell times.

 

● Lifestyle Centres in Residential Growth Zones: Sub-markets like parts of the San Gabriel Valley, South Bay, or other outer zones where population and household income are increasing.

 

● Adaptive Reuse Mixed-Up Properties: Sites converting older retail into new mixed-use formats (retail + housing + office) offer interesting upside.

 

● Coastal / Premium Nodes: While expensive, these still command strong foot-traffic and brand visibility; are attractive for flagships or brand-building stores.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6. Final Thoughts

 

The retail market in Los Angeles in October 2025 is steady but selective. It’s not the breakout boom of years past, but it’s also not collapsing. Instead, it’s evolving — with winners and losers increasingly defined by location, experience, flexibility, and strategic adaptability.

 

If you’re a retailer planning a store rollout or a landlord assessing your retail portfolio, the message is: Invest (or lease) wisely, lean into experience and place-making, and stay flexible. The era of “just open a big box and expect traffic” is behind us — especially in a complex urban market like LA.