Q4 Los Angeles, CA Retail Market Report
Market Overview
The Los Angeles economy is diverse, with significant contributions from the entertainment, tourism, international trade, fashion, and aerospace industries. Los Angeles has an abundance of creative workers and entrepreneurship, leading to elevated levels of business formation and self-employment. Retailers in the market are expected to continue facing long-term challenges, including population losses, rising labor costs, and a growing preference for online shopping. However, strong demand from fitness centers has helped offset losses across different size ranges. Despite more available space, the forecast for rents in the next 12 to 24 months suggests that rent growth will remain below the national index.
Market Performance
The cost of renting is one of the highest in the country, with a market rate of $36.29 per square foot.
The market rent has increased by 1.4% in the past 12 months and has shown annual growth of 2.3% over the past five years. Market rent is four times higher in Beverly Hills compared to suburban submarkets like the Antelope Valley, Southeast Los Angeles, and the San Gabriel Valley. The current vacancy rate is 5.3%. In the past 12 months, there was a negative net absorption of 516,000 square feet, and 1.1 million square feet was delivered. Currently, there are 2.2 million square feet under construction, representing just 0.5% of existing retail inventory in the metro. The largest project underway is the 400,000-square-foot Los Angeles Premium Outlets in Carson. The 12-month sales volume was $3.6 billion. Auto dealerships and owner/user sales constitute a significant proportion of recent trades.
Los Angeles By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 5.3%
- Net Absorption SF: -516K
- Deliveries SF: 1.1M
- Rent Growth: 1.4%
- Sales Volume: $3.6B
To view an earlier Los Angeles and Orange County Retail Market Report, click here.
