Positive Thinking in L.A.
Commercial Observer
Connecting and informing industry leaders of trends and individuals defining the global commercial real estate landscape
The commercial real estate market in America’s second-largest city has taken quite a thumping since the pandemic, its office sector in particular. Things haven’t necessarily improved that much, but there are green shoots in L.A. and its surrounding region. Speaking of the Los Angeles area, check out Commercial Observer’s annual Power SoCal list of the most powerful individuals in the CRE industry there.
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— Tom Acitelli, Deputy Editor
It Might Seem Bleak, But There's Reason for Optimism in Los Angeles' CRE Market
The dreamland that was Los Angeles now sits mired in strife and struggle. The slow collapse of a major industry threatens the city’s economy. Public safety and the city’s streets remain in crisis, and there’s simply not enough housing. A land without limits runs into dead ends, and a laboratory of change seems to produce the latest in urban ills. That dour prediction, from a 1993 Time magazine cover story titled “Unhealed Wounds” may sadly not be as outdated as its age suggests. For commercial real estate, that sense of urban anxiety over the state of a city can magnify market fundamentals. And neither are exactly healthy these days. Los Angeles grapples with a film industry in its worst downturn in decades, a drag on the region so strong that Mayor Karen Bass has assembled a task force. Housing affordability and homelessness continue to metastasize.
2024 Power SoCal
Watching the Southern California market the past few years feels a bit like watching someone drive with their eyes closed: It’s definitely going, but we don’t know where (and that can be quite scary). It’s been four and a half years since the pandemic hit, but the effects are still playing out in every part of the market, and major questions remain unanswered, leaving the City of Angels and its surrounding region uncertain of where to land. Retail suffered first, then office values dissolved. Studios haven’t bounced back from the labor strikes, and even warehouses saw rising vacancy rates this year. And, now, a cloud of multifamily distress looms. The half-built, graffiti-covered Oceanwide Plaza stands in Downtown L.A. as a too-obvious metaphor embodying the state of the market, mocking La La Land and its utopian ambitions.
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