LA’s infusion of multifamily development in 2018 will drive up rents, vacancy: report

Over 17,000 rentals will hit the market, much of them high-priced

TRD LOS ANGELES /
Feb.February 19, 2018 02:00 PM
(Credit: Pixabay, Pexels)

Los Angeles, notorious for its lack of housing, is about to get more than 17,000 rental units this year.

But that doesn’t mean affordability will improve. Instead, rents will rise and vacancies along with it, according to a new report from commercial brokerage Marcus & Millichap.

Rents are expected to rise to $2,200 per month in 2018, a 6.3 percent increase from last year. That’s largely due to the onset of luxury units on the market and a continued confidence in the market, the Los Angeles Business Journal reported.

Vacancy will also rise to 5.2 percent as developers ramp up production on multifamily units. Downtown L.A. and the adjacent Mid-Wilshire neighborhood will receive the largest influx of units, according to the report. The study also cited employment figures that estimated 53,000 new workers in L.A. this year, up 1.2 percent from last year.

Other neighborhoods that can expect new apartments in the future include Hollywood, Marina del Rey and Glendale. The vacancy rate will likely remain at or below 4 percent in those areas, likely because the rent levels will be lower.

Investment in the area will also migrate to non-traditional places like Glendale and Pasadena, as private investors find higher yields and employment hubs.

Other areas like Santa Monica will continue to draw institutional investors, as low supply and high demand keep that so-called Silicon Beach market hot. Vacancy rates there bottom out below 3 percent.


Related Articles

arrow_forward_ios
Architect Simon Park and a rendering of the project (Credit: SSPSTUDIO ARCHITECTURE & URBAN DESIGN)

Boyle Heights slated for another mixed-use project

From left, clockwise: Daydream Apartments’ Griffin and Grace on Spring, Douglas Emmett’s The Glendon at Westwood and Carlyle Group’s Sofia Los Angeles

Here are LA’s 5 biggest multifamily sales of 2019

Monica Rodriguez orchestrated the nixing of a residential project set for the Verdugo Hills Golf Course (Credit: Google Maps, Wikipedia)

The threat of fire doomed this Tujunga resi project. Now the developer will sue

Relevant Group’s Richard Heyman and the project site (Credit: Google Maps)

Relevant Group plans 87-unit apartment complex in South LA

A rendering of the project

Developer files plans to build 87-unit apartment complex in Pico Union

A rendering of the project and Douglas Bystry, President and CEO of Clearinghouse

Koreatown resi complex marks firm’s entry into Opportunity Zones

A rendering of the property, Cityview CEO Sean Burton and Virtu Investments principals Michael Green and Scott McWhorter (Credit: LCP 360) 

Virtu pays $71M for Warner Center complex in Opportunity Zone

6550 South Normandie Avenue (Credit: Google Maps)

Haroni Investments to turn parking lot into new apartments

arrow_forward_ios
Loading...