Commercial real estate investment rose 86% last year

Los Angeles, New York, Dallas lead as industrial, multifamily stay hot

Los Angeles /
Feb.February 15, 2022 05:00 PM

(iStock)

Commercial real estate investors spent $53 billion on properties in Los Angeles, $49 billion in New York and $41 billion in Dallas last year, powering an 86 percent national increase from 2020. The total came to $746 billion, according to a report from CBRE.

Investment in multifamily and industrial properties drove the surge, and Austin had the hottest office sector.

Investors spent $315 billion on multifamily portfolios and single properties, more than double the $145 billion spent in 2020. Industrial investments also soared, with $160 million spent on industrial portfolios and properties, compared to $105 million in 2020.

Investors loved Los Angeles most, spending more than $53 billion on commercial real estate across the area.

The increase came to 83 percent compared with 2020 for the Greater Los Angeles area. The report tracked the bulk of Southern California, covering Los Angeles, Orange, San Bernardino and Riverside counties — the latter two of which are together known as the Inland Empire.

Southern California benefited from brisk markets in both categories, with industrial vacancy rates around 1 percent as far out as the Inland Empire, and demand for apartments strong throughout the wider region.

Investors spent about $21 billion on industrial properties across L.A., the Inland Empire and Orange County, compared to $11 billion in 2020. Multifamily investment also soared across the region, with $18 billion spent on apartments last year, more than double what was spent in 2020.

More investors flocked to office and hotel properties nationally as people returned to work and travel restrictions lifted across the U.S.

Around $136 billion was spent on office portfolios and properties last year, compared to $87 billion in 2020.

Austin saw the highest year-over-year growth in terms of office investment volume. Investors spent $3.5 billion on office properties in 2021, four times the amount in 2020. Amazon, Facebook, Google, Tesla and CBRE have all signed major leases in Austin over the last year, giving investors a reason to bet on the Texas city.

After a sluggish year for the hotel industry, investors spent $42 billion on hotels nationally in 2021, taking advantage of low interest rates and a desire to spend cash on hand. Around a quarter of all that money was spent on hotels in California, according to Atlas Hospitality Group.





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