Downtown L.A. Starting to Mirror Manhattan's Glut of Apartments

Posted by Written on March 01, 2018 at 04:26 PM

More than 4,000 new apartments are forecast to hit the Los Angeles market this quarter, according to CoStar, as the first wave of as many as 30,000 in the next three years. Much of the construction is concentrated downtown, where it’s easier to build than in other parts of L.A., and almost all the new apartments will be at the higher end of the market. Signs of rent weakness are emerging as construction approaches peak, and L.A. landlords could be facing similar pains as as their counterparts in Manhattan, where a flood of supply has started to drive down rents.

According to Bloomberg, “This is the heaviest period in multifamily construction in Los Angeles since the early ’90s,” said CoStar analyst Steve Basham. “We’re about to hit the peak of the cycle.” Rents in downtown Los Angeles are among the highest in L.A. County, after such wealthy markets as Beverly Hills and Santa Monica, but the glut of supply is showing up in flattening growth and concessions, such as six weeks of free rent. Asking rents downtown were unchanged last year, while the effective rent, including concessions, fell 1.4 percent. These economics are similar to those of the Manhattan real estate market, where last month the median rent declined 2.7 percent from a year earlier as demand fell short of supply. 
 
For the full article from Bloomberg, click here.  
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Categories: Real Property, Apartments, Multi Family, New York, California

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