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Commercial real estate in Los Angeles, CA saw positive performance in Q2 2022 compared to Q1 2022.
Average commercial rents grew by about 3% since the first quarter of 2022 to about $34 per square foot per year, while the cost per square foot grew by 1.9% since the first quarter of 2022 to about $3,467 per square foot during Q2 2022.
The city’s industrial real estate market still favors landlords and office space leasing activity is up by about 48% since Q1.
The second quarter of 2022 saw positive performance for commercial real estate in Los Angeles. Overall, average commercial rents grew by about 3%; the average cost per square foot grew by about 1.9%.
The industrial sector saw the strongest growth, with rents rising by about 4.4%. The office and retail sectors both saw modest growth of about 1%.
The hotel sector also saw notable growth with revenue per available room increasing from Q1 2022 by 8.4%.
Looking ahead to the rest of the year, we expect continued growth.
The vacancy rate for office space in Los Angeles, CA was about 27% in Q2 of 2022, a slight increase from the previous quarter.
The average asking rent for office space was $3.25 per square foot, a slight increase from the previous quarter.
The vacancy rate for retail space in Los Angeles, CA sat tight at about 5.1% in Q2 of 2022, about the same as it was in Q1 2022.
The average asking rent for retail space was about $3.21 per square foot, an increase from the previous quarter.
In recent years, there’s been some notable commercial real estate activity in Los Angeles, CA.
These include the following:
These are among some of the most notable.
In the second quarter of 2022, residential rents in Los Angeles continued to grow. The average rental rate for a one-bedroom apartment increased by 4.2% from about $2,100 to about $2,188.
The market forecast for the rest of 2022 is positive, with continued growth in both commercial and residential rents.
Los Angeles’s multifamily market had a strong second quarter, with rents growing and the average cost per square foot increasing.
Class A multifamily properties in Los Angeles saw a decrease in vacancy rates down to about 7.6%
Class B and C multifamily properties are sitting at a vacancy rate of about 3%.
The market is expected to continue to be strong in the second half of the year, with more growth in rents and the average cost per square foot.
Los Angeles had the second-highest multifamily construction volume in Q2 of 2022.
In terms of year-over-year growth, Los Angeles led the nation with a 13% increase in multifamily starts.
This is due in part to the strong job market in Los Angeles, which is attracting new residents and renters to the area.
Retail space purchasing volume in Los Angeles sits at about 7 million square feet year-to-date; leasing volume is just below 5 million in the same time period.
Some of the top sales transactions in Q2 2022 include:
Average sale price for retail space in Los Angeles is about $350 per square foot.
Los Angeles’s industrial real estate market continued to strengthen in the second quarter of 2022, with average asking rents rising 4.4% to $11.32 per square foot and the average cost per square foot climbing 3.2% to $181.62.
The vacancy rate fell slightly to 2.7%, while the average lease term remained unchanged at 3.5 years.
The robust activity in the industrial sector was driven by e-commerce and logistics companies, which have been looking to capitalize on the region’s vast consumer base and dense population density.
Looking ahead, we expect commercial rents to continue to grow at a moderate pace in the second half of 2022, as businesses expand and relocate to Los Angeles in search of lower costs and greater access to customers.
According to data from the Los Angeles Tourism & Convention Board, hotel sector performance in Los Angeles was strong in Q2 2022.
Hotel occupancy rates averaged 82.3%, up 4.6% from Q2 2021.
Average daily room rates increased 3.7% to $196.74, and revenue per available room (RevPAR) grew 8.4% to $161.17.
Los Angeles’s positive market performance in Q2 2022 may see some moderation in the coming quarters among inflationary pressures and rising interest rates. Nonetheless:
Always do your research, stay diligent, and happy investing.
All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.
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