- calendar_month August 22, 2024
- folder Real Estate
Los Angeles, CA, offers a thriving, top-tier metro with a massive population, surging economic growth, and plentiful commercial real estate opportunities for ambitious investors and tenants alike.
The sprawling MSA features a sizable CRE inventory within its thousands of square miles, dozens of cities, and multiple regions. Principals and expanding businesses consider Los Angeles a premier area to invest in commercial property. Crexi proudly equips property seekers with the tools to identify Los Angeles commercial real estate that precisely fits their needs.
Los Angeles commercial agents – and brokers representing Los Angeles property for sale – harness Crexi’s powerful listing and lead management platform to interact with active buyers and tenants. Using Crexi’s software suite, Los Angeles commercial brokers can discover hundreds of leads, save time, and close more deals faster.
As of this writing, Crexi has helped brokers and buyers transact more than $540 billion in property sales and marketed assets representing over $5 trillion in total.
Crexi proudly serves Los Angeles, Long Beach, Anaheim, Pasadena, the Inland Empire, and the Greater Los Angeles metro as the region’s fastest-growing digital CRE platform.
The State of Los Angeles Commercial Real Estate
Los Angeles presents many opportunities for commercial real estate investors, business tenants, and entrepreneurs. The expansive region encompasses various submarkets with unique characteristics and offerings catering to multiple industries and business needs.
From the bustling downtown core to the thriving tech scene in Silicon Beach, the city’s diverse landscape allows businesses to find the perfect fit for their specific requirements. Whether it’s a state-of-the-art office space in the city’s heart or a sprawling industrial facility near the Port of Los Angeles, the opportunities are abundant, positioning the Los Angeles metropolitan area as a prime destination for business growth and investment.
Los Angeles Regional Breakdown
Over the past decade, Los Angeles has experienced a relatively flat population growth rate — considered a positive trend for the city. This stable growth has allowed the city to manage its resources and infrastructure better, addressing issues such as housing affordability, traffic congestion, and environmental concerns.
The diverse community continues to thrive, while city planners have the opportunity to focus on sustainable development and improving the overall quality of life for its residents.
- Nearly 4 million reside in the city, with just under 13 million in the metropolitan area.
- According to the most recent census, the population increased by 0.01% since 2010.
- Los Angeles County is the most populous county in the United States and one of the nation’s largest counties, with 4,084 square miles.
- LA, Long Beach, Santa Clarita, Glendale, and Lancaster are the most populated cities.
- Per capita income is $40,569, and median household income is $82,503, both figures higher than in the US.
- The median age is 38.1, with 42% of the residents between 29 and 49.
- About 80% are high school graduates or higher, about 90% of the rate in the US.
- Over 37% hold a bachelor’s or postgraduate degree, a little higher than the national average.
Los Angeles Job Market
Los Angeles is home to a diverse and thriving economy, driven by many industries contributing to the city’s growth and prosperity. As a global hub for entertainment, the city’s film and television industry plays a significant role in its economic landscape.
In addition to the creative sector, the region has established itself as a prominent player in international trade, technology, aerospace, and tourism. The city’s strategic location on the Pacific Rim further enhances its economic prowess, enabling strong connections with markets in Asia and Latin America.
- The GDP for Los Angeles-Long Beach-Anaheim MSA is over $1.12 trillion, the 2nd largest in the US.
- The region’s gross domestic product is greater than countries such as Indonesia, Switzerland, and Sweden.
- The unemployment rate is 4.8% as of May 2023, according to the US Bureau of Labor Statistics (BLS).
- The region has one of the most diverse economies in the country, with major industry clusters including aerospace, biosciences, entertainment, trade, EV and advanced transportation, ocean economy, fashion and apparel, tourism, and IT.
- Google, Hulu, Snap, Youtube, SpaceX, and Headspace are five of the many tech companies headquartered in LA.
- The largest employers are the County of Los Angeles, the Los Angeles Unified School District, the City of Los Angeles, the University of California-Los Angeles, the Federal Government, Kaiser Permanente, and the State of California.
- Major colleges include the University of Southern California, Pepperdine University, Chapman University, and California State University-Long Beach.
The region’s transportation network spans thousands of miles of highways, including I-5, I-10, I-110, and I-405. Major metros, including San Diego, San Francisco, Las Vegas, and Tijuana, are all within a 1-day drive of LA.
Los Angeles International Airport (LAX) serves as a significant global hub, while smaller airports like Hollywood Burbank Airport (BUR) and Long Beach Airport (LGB) provide additional connectivity. The Port of Los Angeles, one of the busiest seaports in the US, plays a crucial role in international trade.
Los Angeles Industrial Market
The Greater Los Angeles industrial market maintains relative health in terms of occupancy and vacancy. However, there’s a discernible softening in leasing demand for both Class A and Class B properties and industrial surface lots. Several factors drive this trend, including decreased volumes at the ports, potential domestic and global recession risks, and inflation impacting consumer spending habits.
According to Kidder Mathews, these conditions suggest that the Los Angeles County Industrial market may be approaching a period of pricing discovery concerning lease rates, sale prices, and capitalization rates.
Market overview (Kidder Mathews Q1 2023)
- Inventory: 746,177,636 SF
- Vacancy rate: 3.6% overall
- Absorption: -1,157,817 SF
- Key leases by tenant: Furniture of America 472,876 SF, NRL/Platinum 312,212 SF, Weida Freight Systems 274,474 SF
- Largest submarkets: Central, South Bay, San Gabriel Valley
Crexi Intelligence
These are the most recent lease and sales trends from Crexi Insights (as of July 2023):
For Lease (active)
- Asking rate/SF (median): $19 per year
- Median SF/listing: 6,889
- Days on market: 104
- Total listings on Crexi: 1,045 spaces
For Sale (active)
- Median asking price: $3.25 million
- Price/SF: $351
- Asking cap rate: 4.9%
- Days on market: 127
- Total listings on Crexi: 310 listings for a total of 15.8 million SF
Sales Comps (past 12 months)
- Median sold price: $3.0 million
- Sold price/SF: $321
- Total sales volume: $6.37 billion
- Sold cap rate: 4.3%
- Median SF sold/transaction: 8,983
- Total SF sold: 20.2 million
- Days on market (median): 109
Discover Los Angeles industrial space for lease.
Los Angeles Office Market
The Greater Los Angeles office market faces significant challenges as it deals with workforce contraction from major tech firms, downtown distress marked by loan defaults and rising vacancies, and a cautious market outlook. However, the demand for sound stage space provides some optimism, with heavy investments from entertainment firms.
Overall, there’s an expected increase in vacated space and a projected decline in leasing activity and asking rates, primarily due to softening demand from tech and entertainment sectors, according to Cushman & Wakefield.
Market overview (Cushman & Wakefield Q1 2023)
- Inventory: 213,115,667 SF
- Vacancy rate: 22.5%
- Absorption: -449,690 SF
- Key leases by tenant: Sony Corporation 225,539 SF, Ares Management 206,000 SF, San Gabriel Regional Center 100,000 SF
- New construction: 3,385,341 SF
- Largest submarkets: LA West, LA South, LA North, Downtown CBD
Crexi Intelligence
Crexi provides up-to-date data on the office market in Los Angeles County. Here are the most recent lease and sales trends (as of July 2023):
For Lease (active)
- Asking rate/SF (median): $34 per year
- Median SF/listing: 1,324 SF
- Days on market: 204
- Total listings on Crexi: 7,765 spaces
For Sale (active)
- Median asking price: $3.52 million
- Price/SF: $462
- Asking cap rate: 5.0%
- Days on market: 134
- Total listings on Crexi: 330 listings totaling 6.54 million SF
Sales Comps (past 12 months)
- Median sold price: $3.31 million
- Sold price/SF: $387
- Total sales volume: $2.37 billion
- Sold cap rate: 5.4%
- Median SF sold/transaction: 7,020 SF
- Days on market (median): 143
Discover Los Angeles office space for lease.
Los Angeles Retail Market
The Los Angeles retail market is experiencing a period of adjustment. There’s been an uptick in the overall market vacancy rate, with the Inland Empire recording the highest submarket vacancy. Despite this increase, the average asking lease rates have significantly risen compared to the same period in the previous year.
Regarding development, construction activity has nearly doubled since the last quarter of the previous year, indicating a substantial volume of space in the pipeline. These trends suggest a dynamic retail market navigating through various challenges and opportunities, based on the most recent report from Colliers.
Market overview (Colliers Q1 2023)
- Inventory: 859,423,940 SF
- Vacancy rate: 6.0% overall
- Absorption: -1,146,630 SF
- New construction: 2,591,925 SF
- Largest submarkets: Northwest, South, West
Crexi Intelligence
Lease and sales trends from Crexi Insights (as of July 2023):
For Lease (active)
- Asking rate/SF (median): $30 per year
- Median SF/listing: 1,805 SF
- Days on market: 225
- Total listings on Crexi: 4,742 spaces
For Sale (active)
- Median asking price: $2.67 million
- Price/SF: $515
- Asking cap rate: 5.0%
- Days on market: 116
- Total listings on Crexi: 639 listings for a total of 7.44 million SF
Sales Comps (past 12 months)
- Median sold price: $2.05 million
- Sold price/SF: $429
- Total sales volume: $7.46 billion
- Sold cap rate: 5.3%
- Median SF sold/transaction: 4,280 SF
- Days on market (median): 141
Discover Los Angeles retail space for lease.
Los Angeles Multifamily Market
The multifamily market in Los Angeles is witnessing a shift following the lifting of pandemic-era state and local eviction protections. This change has seen both vacancy rates and rents in Los Angeles County rise since the start of 2023, as tenants who cannot meet their rent obligations face the possibility of eviction.
In addition, there has been a decrease in completed construction, with the number of multifamily housing units under construction also seeing a modest decline from the previous quarter. According to NAI Capital, these changes reflect a market in flux, grappling with the challenges of the post-pandemic landscape.
Market overview (NAI Capital Q1 2023)
- Total inventory: 1,175,594 units
- Vacancy rate: 4.2%
- Average asking rent: $2,156
- Recent sales by property: Angelene Apartments $112.5 million, Westside Villas Apartments $66.1 million, Haven Warner Center $54 million
- Top submarkets by inventory: West, North, Central
Crexi Intelligence
Here are the most recent Multifamily Insights from Crexi (as of July 2023):
For Sale (active)
- Median asking price: $2.4 million
- Price/SF: $449
- Price/Unit: $349,000
- Asking cap rate: 4.4%
- Days on market: 92
- Total listings on Crexi: 606 listings totaling 6.11 million SF
Sales Comps (past 12 months)
- Median sold price: $1.2 million
- Sold price/SF: $416
- Sold price/unit: $333,000
- Total sales volume: $10.3 billion
- Sold cap rate: 4.3%
- Total SF sold: 24.3 million
- Days on market (median): 86
