Scarce housing, durable Class B office demand and industrial fueled by solid trade position L.A. for strong investment returns
Guide
21 April 2024
What’s driving the Los Angeles market?
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With a severe housing shortage and infrastructure driving global trade, Los Angeles' commercial real estate market stands out for investors seeking compelling opportunities across asset classes. But before you invest, you need to truly understand what's driving the L.A. metro to guide your investment decisions.
We've gathered the need-to-know insights across apartments, office, industrial and retail that will give you a crash course in the trends shaping the Los Angeles market.
Here are some highlights:
With over $16.7 billion in floating-rate multifamily debt coming due in 2024-2025 and just a 1.4% affordable housing vacancy rate, distressed asset opportunities could emerge
While institutions pulled back, private buyers captured 8% of 2023's national Class B office transaction volume by acquiring properties at rising 24.6% vacancy rates
Despite a 4.8% industrial rental rate correction, L.A.'s port infrastructure handling 40% of U.S. import volumes positions this land-constrained market for future tenant demand
With retail vacancy at just 5.6%, reasonably priced neighborhood centers in affluent areas averaging 5% cap rates could offer untapped value with limited new supply coming