Los Angeles is a fast-growing commercial real estate market. While traditionally cities such as New York, London and Tokyo have topped the global CRE market, they are now being challenged by several other cities, and Los Angeles appears to be at the top of this new wave. With transactions totaling $22.9 billion in 2017, Los Angeles surpassed New York City in world rankings and was second only to London.
Los Angeles is more affordable than many of the traditional leading cities, and there are also more opportunities there for investors. Other factors are its size, its economic strength, its connectivity to the rest of the country, and its diverse economy. All of the cities that are rising up to challenge the traditional commercial real estate markets share additional traits such as multiple clustered specializations and global capital’s trust.
In 2017, the office sector was responsible for 47 percent of flows followed by the industrial sector with 30 percent, retail with 17 percent and hotels with 6 percent. Sovereign wealth funds, value-add equity and debt fund strategies have all been significant in this growth. It is anticipated that Los Angeles will remain attractive to investors in 2018.
Investing in real estate may create a number of complexities, but an attorney can often assist in preliminary due diligence on a targeted property and the preparation and review of purchase agreements and other documents. Other areas in which an attorney’s help can be advisable include ensuring that all applicable laws and regulations are complied with and locating alternative sources of equity and debt financing.