Los Angeles Multifamily Report – Summer 2019
- Sep 03, 2019
Supply has yet to catch up with demand in the Los Angeles multifamily market, boosted by ongoing household formation and steady hiring, all in the context of a high barrier to homeownership.
The metro’s business-friendly environment and well-educated, specialized labor force are drawing more companies to the region, while placing the local economy at the top of the most productive large U.S. cities for GDP growth. Education and health services led employment gains year-over-year as of May with the addition of 18,600 jobs, followed by professional and business services (13,600 jobs) and leisure and hospitality (12,700 jobs). The construction industry is also thriving (9,300 jobs), sustained by large-scale projects underway, including the $2.6 billion NFL stadium in Inglewood, the $4.9 billion people mover tram at Los Angeles International Airport and the $1.5 billion Lucas Museum of Narrative Art.
Investors seeking market stability and property value appreciation pushed the multifamily transaction volume to a cycle peak in 2018, when more than $5.4 billion in assets traded. In the first half of 2019, nearly $1.2 billion in properties traded, both Lifestyle and RBN. Meanwhile, development activity remained strong, with more than 26,500 units underway as of June. Absorption is expected to keep up, leading to 3.5 percent rent growth in 2019.