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