Apartment vacancy remains far below office vacancy
CBRE's Pasadena office snapshot reports overall vacancy of 23.4 percent and availability of 27.3 percent. A third-party multifamily report for the local market estimates apartment vacancy near 3.7 percent. The datasets use different methods and shouldn’t be treated as an exact comparison, yet the gap is large enough to show how differently the two property types are performing.
An office landlord competes with empty space across many buildings as well as each tenant’s option to use fewer square feet. Apartment owners face competing housing, yet their renters still have to secure somewhere to live, creating a stronger demand floor for apartments under current conditions.
Old Pasadena, Caltech, and transit support renter demand
Pasadena combines employment, education, transit, retail, and access to the rest of Los Angeles County. Caltech, Pasadena City College, Huntington Hospital, professional services, and nearby research institutions create housing demand across several groups, reducing the renter base's dependence on any single employer.
Housing supply is also difficult to expand quickly. Land is expensive, entitlement takes time, and construction costs are high. A new apartment project must support a large total development cost, limiting how fast supply can respond even when rents are strong.
Hybrid work reduced demand for older offices
Pasadena office buildings once benefited from companies seeking a professional location outside Downtown Los Angeles. Well-located Class A space, medical offices, and firms that need employees together still value the area, but many tenants now need fewer square feet per worker.
Hybrid work acts like hidden supply. A company can renew for less space even if its headcount is unchanged. Sublease space adds another layer of competition. Older buildings face the hardest decision because renovations are expensive while asking rents are constrained by high vacancy.
23.4%Pasadena office vacancy
27.3%office availability
3.7%modeled apartment vacancy
Low apartment vacancy doesn’t guarantee a good purchase price
Pasadena apartments can trade at prices that already reflect low vacancy and years of expected rent growth. The return available to a new buyer still depends on California regulation, insurance, property taxes, repairs, financing costs, and the amount of future performance already included in the purchase price.
A property review should include the difference between in-place rent and legal market rent, building age, utility responsibility, parking income, and near-term capital needs. Low vacancy can still sit beside old plumbing and underfunded repairs.
Office recovery needs leasing, conversions, and safer streets
Office performance could recover if job growth strengthens, companies require more in-person work, or obsolete buildings leave the competitive set. Housing conversion may reduce some excess supply, although floor plates, plumbing routes, window depth, zoning, and construction cost make many buildings poor candidates.
The best office buildings may recover much faster than the market average because tenants still value natural light, walkable locations, modern systems, and nearby restaurants. The broad demand picture doesn’t describe every individual asset. A high-quality office acquired at a deeply reduced price could outperform an apartment purchased with little room for error.
Pasadena’s apartments have held up better because housing demand is harder to postpone than an office lease. Greater stability doesn’t make every apartment purchase attractive, so I would still want to know the price, current rents, local rules, insurance cost, repair history, and loan terms. A full building can be a poor investment when the buyer pays for years of growth before that growth actually arrives.
I used the filings, reports, public records, and articles linked below. Figures in the three case studies are practice numbers and are identified near the top of each article.
01City of Pasadena and CBRE office market presentation↗02City of Pasadena housing plan↗