Snapshots

Mixed-use developments with an office and residential component gaining traction in Los Angeles

Three major developments are incorporating office, residential and retail components in the same project.

February 04, 2020
  • Two of the developments are located near public transit. One project will also include a hotel.  Combined, these three developments represent 18 percent of all current office construction.
  • The demand for multifamily has been strong. At 48.6 percent, Los Angeles has one of the lowest homeownership rates in the country. Rising home prices assures a solid pool of renters. 
  • The office demand as of late has been robust with vacancy dropping below 10 percent in some entertainment, media and tech-rich markets. At the Ivy Station, HBO leased the entirety of the office portion currently under construction.
  • These projects provide the urban blueprint supporting a full work-live-play model which appeals to the Millennial talent seeking a greater sense of community and an abundance of amenities.
  • By creating synergies with other uses, some large projects around the country are commanding rent premiums in excess of 15 percent. 
  • Increased urbanization and density across Los Angeles will further encourage developers to pursue projects incorporating commercial and residential uses.  

 

Source: JLL Research, fred.stlouisfed.org