LA County Q1 2021 CRE Market Outlook
A year into the pandemic, the pace of LA County’s commercial real estate markets has changed.
As the economy began to reopen from the Covid-19 shutdown, all property types, with the exception of industrial, had more available space sitting on the market in Q1 2021.
Available industrial space decreased 22% in Q1 2021, dropping back near levels seen before Covid-19 shut down everything. The acceleration of online shopping and ecommerce growth during the pandemic boosted demand for warehouse and distribution space in the region.
The average asking rent rose for office and industrial space, while asking rent for multifamily and retail decreased from a year ago.
The outsized 4.2% growth in asking rent for office space came even as space piled up due to a year of shrinking demand in the region caused by the pandemic. Undeterred, landlords pushed rents past pre-pandemic levels. The average asking rent for office space in LA County hit a new high in Q1 2021.
Retail registered the worst annual rent trend of the all property types, falling 2.3% from a year prior. Motivated landlords decreased rents to attract tenants, as demand plummeted.
Multifamily remained in suspense with a statewide eviction moratorium in place through June 30, 2021, making it difficult for landlords to collect rents let alone increase them. The average asking rent for multifamily housing was down 1.7%.
Asking rent for industrial space continued at a record pace into the new year, up 4.0% annually – taking the top spot in demand among all the property types.