West Hollywood/Hollywood Multifamily Market Report

West Hollywood Market Overview

West Hollywood’s submarket vacancy remains at a low of 4.4%, which is one of the lowest levels observed in decades. The area has some of the highest median home prices in the metro, leading to a high percentage of renters occupying nearly 70% of the housing units. Currently, there are 180 units under construction as of April 2023, representing 1.2% of the existing units in the submarket. The average cap rate in West Hollywood currently sits at 3.7%, which is below the Los Angeles metro average of 3.9%. Compared to neighboring cities such as Hollywood, Studio City, and Mid-Wilshire, West Hollywood has been relatively unaffected by new supply pressures. As a result, the current level of construction is manageable. Located near some of the city’s most prominent employment and retail centers, West Hollywood is a small and wealthy city that is highly sought after. It is widely regarded as an attractive community by many and is one of the most walkable areas in the greater Los Angeles metropolitan region.

Market Rent Per Unit

90038 – $2,126

90046 – $2,408

90048 – $2,930

90069 – $2,987

West Hollywood By the Numbers, Last 12 Months

Sales Data

Cap Rate: 3.9%

Sale Price/Unit: $545,926

Average Sale Price: $9.9M

Sales Volume: $237M

Sale vs Asking Price: -21.8%

Average Units: 18

Months to Sale: 4.4

Demand

Employers

The most common job groups, by the number of people living in West Hollywood, CA, are Management Occupations (3,792 people), Arts, Design, Entertainment, Sports, & Media Occupations (3,711 people), and Office & Administrative Support Occupations (3,011 people). – Data USA

Schools

West Hollywood, CA has 7 schools, 1 of them Elementary, 0 Middle Schools, 1 High School, and 1 alternative School.

Where/How is the City Investing Tax Dollars?

• Hart Park

In March 2018, the City Council asked for a plan to improve William S. Hart Park, but improvements had to wait until a new lease was signed. A new lease was signed in October 2019, and staff developed recommendations for improvements. Community outreach is done, and a consultant will create designs and construction documents. In late Q1 of 2023, staff presented improvement concepts and opportunities for the park to the City Council for approval. If approved, staff will finalize designs and start construction.

• Holloway Homekey Renovation Project

The Holloway Motel will be bought by the City for transitional housing with support services using a Project Homekey grant. The purchase was completed in March 2023. The grant requires the property to be used for transitional housing for at least 15 years. An RFP for design services was issued, and the City Council awarded an agreement for architectural services in March as well. As of Q2 2023, staff is recommending more construction management services to oversee the renovation.

• City Playhouse

A new playhouse and rehearsal space will be built at the City Playhouse, with 99 seats and around 5,000 square feet. Perkins and Will, Inc. are designing the facility with input from the community and artists, and the City Council Design Steering Committee will advise the team. A schematic design will be presented for approval in late Q2 of 2023.

• Laurel House

The City owns the property at 1343 N. Laurel Avenue, which includes a residential dwelling and an accessory structure. In 2018, the Arts and Cultural Affairs Commission presented a report to the City Council, suggesting it could be used as an artist-in-residency program site. An Ad Hoc City Council Subcommittee was established, which reviewed a report with input from various commissions. On October 3, 2022, the City Council approved the artist-in-residency program and other public spaces, such as city archives, exhibition space, and studio maker space. The City staff is reviewing proposals for architectural services to convert and renovate the Laurel House, and the City Council was presented with a contract on March 20, 2023.

• Plummer Park Comprehensive Plan.

The City is planning to improve Plummer Park and will initiate a community-based outreach process to create a comprehensive improvement plan. The first event was an Open House in November 2022 where attendees discussed the park’s future. The City will acquire third-party consultant services as needed and oversee the outreach, design, pre-construction, and construction. The City plans to seek approvals for outreach and design services from the City Council later this year.

• 8120 Santa Monica Boulevard at Crescent Heights Boulevard

The City owns a vacant 40,140 square feet site at 8120 Santa Monica Blvd that consists of four parcels. Additionally, the City recently acquired the adjacent parcel at 1047 N. Crescent Heights Blvd, which offers more development options for the corner location. The site is presently leased as a staging area for another private development for the next two years. In December 2022, the City started collaborating with Grimshaw to examine possible uses for the site, like city services consolidation, non-profit spaces, housing options, or other community-related uses. The City seeks Council’s approval and funding to engage Grimshaw for conceptual designs and feasibility studies for each site.

Hollywood Market Overview

The multifamily market in Hollywood offers a wide array of housing options, from modern luxury apartments with upscale amenities to charming historic buildings with unique architectural features. In recent quarters, the demand for renters in the Hollywood submarket has been moderate, similar to the Greater Los Angeles area. Vacancy rates have increased from 5.0 to 5.9 percent. Rental rates have remained relatively stable over the past year, with a slight decline of -0.2 percent in the last 12 months. A little over 630 new apartment units were added in the past year. Sales activity has been resilient, with consistent dollar volumes, with the 12-month sales volume currently at $329 million. The market continues to experience growth as local and international individuals are drawn to Hollywood’s allure and glamour of multifamily offerings.

Hollywood By the Numbers, Last 12 Months

Sales Data

Cap Rate: 5.2%

Sale Price/Unit: $13.9M

Average Sale Price: -8.7%

Average Units: 32

Months to Sale: 3.6

Demand

Employers

The top 5 employers in Hollywood include Kaiser Permanente Hospital, Paramount Pictures, Children’s Hospital of Los Angeles, Universal Studios, and Sunset Gower Studios. – Hollywood Blog