The Tech Company’s Guide to Office Space in the San Fernando Valley

The San Fernando Valley (SFV) has long been a dynamic hub for growing businesses – from media-tech firms in Burbank to startups in Sherman Oaks and Woodland Hills. In today’s post-pandemic market, vacancy rates remain high, giving tenants unusual leverage.

For example, SFV office vacancy was roughly 25.8% in late 2024 (down modestly from 26.3%), and even “direct” vacancy was about 13.5% in early 2025. Well-capitalized or creditworthy tech firms may find the current tenant-friendly climate conducive to negotiating more flexible lease terms.

However, smaller startups or early-stage companies without strong financials may face more constraints, particularly with institutional landlords who still vet tenant risk closely. Working with a tenant-only advisor (such as Mazirow Commercial, which “is an advocate for you – the tenant or buyer – and never represents the landlord”) can unlock the best deals.

Tech companies leasing in the San Fernando Valley find landlords eager to fill space. With vacancy well above pre-pandemic levels, tenants can insist on lease clauses that build in agility.

Below are key strategies to consider:

Negotiating Flexibility

When signing a lease, carve out options that let your company pivot as needed. Possible flexibility provisions include:

• Break or buyout clauses: Negotiate the right to terminate or shrink the lease after a few years. For example, if you commit to a long lease to get tenant-improvement funds, ask for a mid-term exit or buy-out option (e.g. exit after 5 years). This “cancellation right” ensures you aren’t locked in if business changes.
• Sublease/assignment rights: Insist that the lease explicitly permits you to sublease or assign space. This is vital for scaling – you can move up or down in size while keeping costs manageable. By writing flexible “use rights” into the lease, you retain the option to sublet excess space or take on a subtenant.
• Multiple renewal options: Secure several renewal periods (at predefined rates if possible). In other words, get as many renewal options as possible. For example, a 5-year lease with two 3-year renewal options (at a fixed escalation or negotiated formula) lets you extend on favorable terms if you need more time.
• Short initial term or phased lease: If long leases scare you, start with a shorter term (3–5 years) with the option to extend. A short-term “toe-in-the-water” lease gives flexibility without sacrificing credit.
• Vendor improvements and tenant-credit allowances: While not terms per se, you can also ensure TI allowances and rent abatements to offset market risk. (With high vacancy, landlords often agree to cover build-out costs or offer free rent.)

Not every landlord will agree to expansive flexibility. For example:

• Break clauses often require significant rent premiums or are limited to specific dates.
• Sublease rights may be narrow or subject to strict approval criteria.
• Short-term leases can mean limited improvement funds or higher effective rent.

Your goal isn’t to “win” every term but to prioritize the specific levers that matter to your operational model: scaling headcount, hedging against volatility, or retaining expansion capacity.

Use Expert Support Strategically

A savvy tenant rep will help you package these elements. For instance, Mazirow Commercial Inc. can review lease drafts line-by-line so you “don’t leave dollars on the table and retain your rights”. By insisting on these flexible clauses upfront, your company can accelerate hiring or trim overhead without renegotiating an iron-clad lease.

Expansion & Contraction Clauses

Beyond general flexibility, you can build explicit expansion (and downsizing) rights into the lease. Common provisions include:

• Right of first offer (ROFO): This guarantees you the first chance to lease any adjacent or newly available space in the building or complex. In practice, the landlord must notify you of any upcoming vacancy and give you an offer before seeking other tenants. This lets you grow in place without moving.
• Right of first refusal (ROFR): A ROFR lets you match any third-party offer on nearby space. The landlord is free to market vacancies, but if another tenant bids, you have the right to match those terms. (It’s a useful backstop if ROFO isn’t granted.)
• Expansion reservation or must-take clauses: Some leases include language that obligates the landlord to set aside contiguous space for you, or offer it to you first, up to a certain square footage. This can be structured as “landlord will not lease floors 4–6 without offering them to Tenant first,” for example.
• Pre-negotiated expansion rates: Agree on the pricing formula for any expansion space at the outset (e.g. your expanded square footage rents escalate at no more than 3% annually or a fixed $PSF margin). This avoids surprises if the market shifts.
• Contraction or surrender options: Just as you can expand, consider rights to downsize. A lease might allow you to “surrender” part of your footprint (with rent only on the remaining portion) or require landlord consent to sublease part of your space. Even a contractual break clause (from above) is a form of planned contraction: you can exit if growth stalls.
• Submarket relocation: In an extreme case, negotiate a right to relocate to another building owned by the same landlord in the SFV area, should a better or more fitting space open up.

Many of these tools hinge on market leverage – it’s much easier to get a ROFO/ROFR on an expanding space now that landlords are keen to keep tenants. In short, negotiate every clause that could let your company scale up or down without a costly move.

Market Leverage Today

Current SFV market conditions strongly favor tenants. Several recent reports illustrate why: Los Angeles-area vacancy rates are near all-time highs, and the SFV is no exception. In Q4 2024, the SFV’s office vacancy was ~25.8% – one of the highest in decades – even as asking rents in the Valley barely budged. (For comparison, overall L.A. County office vacancy was about 24.9% in late 2024.) Kidder Mathews’ 2025 data show about 13.5% direct vacancy in the Valley, which remains well above healthy levels.

Tenants can capitalize on this surplus. High vacancy and abundant sublease space mean landlords are competing for creditworthy tenants. In practical terms, expect incentives like free rent, large tenant improvement allowances, and locked-in escalation caps. You can use SFV’s 2025 vacancy data in negotiations: for instance.

Another lever: the SFV isn’t monolithic. Submarkets vary, which you can tailor to. Woodland Hills lofts and Sherman Oaks storefronts currently advertise generous deals, while even Burbank and North Hollywood (formerly tight) are softer than a year ago. Local brokers can point out hidden opportunities – e.g. an upcoming move-out in a tech campus – that national reports miss. A tenant advisor familiar with the San Fernando Valley such as the specialists at Mazirow Commercial Inc.) can highlight these pockets.

Subleasing Options for Startups

Subleasing can offer flexibility for tech companies navigating uncertain growth, but it’s not a one-size-fits-all solution. The ability to sublease—and benefit from it—depends on your company’s profile, your lease structure, and the broader market environment.

Know Your Position

While well-funded or established tech firms may have the credibility to negotiate broad sublease rights, earlier-stage startups or companies with limited credit may face tighter restrictions. Many landlords—especially institutional owners—closely evaluate a tenant’s financial strength before agreeing to assignment or subletting provisions. Private landlords may be more flexible, but even then, risk mitigation remains their priority.

Strategic Uses of Subleasing

When structured well, subleasing can still be a valuable hedge. For example:

• Right-size without waste: If you lease extra space in anticipation of growth, subletting surplus areas can reduce overhead during slower periods.
• Contract flexibly: If headcount shrinks, you can potentially reduce your footprint without breaching your lease.
• Spinouts and shared operations: Some firms sublease to affiliated startups or divisions in adjacent suites, controlling costs while maintaining proximity.
• Leverage coworking: Flexible office providers (e.g., WeWork, Industrious) may serve as informal overflow, or even become subtenants if your space layout allows.

But Be Cautious
Subleasing also introduces real constraints:

• Landlord consent is typically required and can be delayed or denied based on the proposed subtenant.
• You retain liability for the full lease even if a subtenant fails to pay.
• Excess sublease inventory in the SFV means finding a taker can take months—or require rent discounts.
• Legal complexity around assignments, licenses, and subleases can create unexpected administrative costs.

To mitigate these issues:

• Negotiate sublease rights upfront: Seek language that defines reasonable approval criteria, timelines (e.g., 10–15 days), and automatic consent for pre-approved categories (e.g., affiliates).
• Build in flexibility around use: Broad “use clauses” can make your space more appealing to subtenants.
• Work with brokers who understand local absorption: A tenant rep can evaluate your sublease potential before you overcommit.

Bottom line: Subleasing is not a guaranteed escape hatch. It’s a risk-management tool that works best when matched with strong upfront lease terms, realistic growth projections, and a proactive approach to space planning.

The SFV’s current office market is a boon for tech tenants who know how to ask for what they need. Between high vacancy rates and ample sublease supply, tech firms are in a strong negotiating position. To capitalize on these conditions, be proactive: draft your lease with expansion/contraction clauses, multiple renewals, and sublease rights, rather than treating it as a standard form.

Consulting a tenant-specialist broker can make a big difference. A dedicated advisor (like those at Mazirow Commercial) brings local market insight and negotiation experience that landlords respect. They can help you structure the right combination of terms, evaluate landlord offers, and ensure your lease really works for your business strategy.

Do your homework now while SFV office availability is high. By negotiating flexible terms and leveraging market data, your tech company can secure an office deal that powers growth – without overcommitting. When you’re ready to explore options in Woodland Hills, Sherman Oaks, Burbank or beyond, reach out to a trusted tenant rep for guidance and support.

Ways to Personalize This Guide

• Client Case Studies or Testimonials – Add a short success story from a past client—e.g., how a tech firm used flexible clauses to grow in SFV. This builds credibility and uniqueness.
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