Los Angeles, CA Economic Overview
Set between the beach and the mountain, the City of Los Angeles is the rich middle that has something for everyone. With a population estimated at a little over four million, it’s the second most populous city in the U.S.A. In addition, L.A. draws over 25 million tourists a year. At this rate, “busy" is an understatement. With so much to show off and opportunity at every step, the Los Angeles commercial real estate market is always bustling.
The region’s economy is mostly driven by international trade, entertainment in all its forms, technology, aerospace, fashion and tourism. With two seaports, three international and two domestic service airports, as well as access to transcontinental rail, Los Angeles is one of the busiest international trade hubs in the world. The city is well connected, open to any productive opportunities and, given its varied and educated workforce, there’s a niche for every business.
Los Angeles, CA Commercial Real Estate Market
L.A. is not only the largest retail market in the country, but also the biggest manufacturing center in the Western USA. The sprawling metropolis covers several valleys and offers 470 square miles of dry space in which any business can find a comfortable operational spot. There’s over 130M SF of commercial space, in properties of over 50k SF that are either office, office with retail or industrial.
Downtown Los Angeles office market includes finance, business, professional and legal services. Growing industries are entertainment, technology, architecture and other creative disciplines. Downtown L.A.’s retail and hospitality enterprises are on the rise due to population growth, ample tourism, renowned education facilities and excellent access to transport. Per Avison Young, the private sector has invested $16 billion in Downtown L.A., "one of the most dynamic urban cores in the world".
West Los Angeles is home to educational institutions like UCLA and Pepperdine University and is now recognized as an epicenter of creative office, also named "Silicon Beach". It is home to a great variety of successful industries: entertainment, media, technology, legal and financial services, engineering, architecture, real estate and much more. The area offers a wide array of amenities to those who choose to live, work and play here. West L.A. office market accounts for 28% of the Los Angeles County office market. The retail scene is famous for the high rents commanded by desirable corridors such as Beverly Hills’ Rodeo Drive, Santa Monica’s 3rd Street promenade and West Hollywood's Melrose District.
North Los Angeles is “Creative Central". Home ground of anything Hollywood, the entertainment business sector takes up a great portion of the North LA office market and is joined by real estate, finance and insurance companies. Avison Young research indicates that the retail vacancy rates have remained below 5% here due to favorable long-term lease conditions, which also drew company headquarters and flagship store openings to the area.
Los Angeles – Santa Monica is integrated in the “Silicon Beach" corridor that has bred hundreds of technology startups. The area has become progressively populated with media, tech and entertainment office users. This increase in demand has, in turn, attracted developers into the business of transforming old properties into creative office and collaborative workspaces. The Santa Monica Pier is a famous retail location that caters to the over 7 million visitors that descend on Santa Monica each year.
Los Angeles, CA Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
Los Angeles, CA Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Los Angeles, CA Commercial Inventory Breakdown
Total: 198,165,213 SF
By square footage range:
- 50k to 100k SF: 31,627,733 SF / 15.96% of total office
- 100k to 500k SF: 112,687,051 SF / 56.87% of total office
- 500k to 1M SF: 28,601,829 SF / 14.43% of total office
- > 1M SF: 25,248,600 SF / 12.74% of total office
- Class A+: 16,741,057 SF / 8.45% of total office
- Class A: 99,114,179 SF / 50.02% of total office
- Class B: 63,325,168 SF / 31.96% of total office
- Class C: 2,014,353 SF / 1.02% of total office
Total: 49,822,563 SF
By square footage range:
- 50k to 100k SF: 3,899,168 SF / 7.83% of total industrial
- 100k to 500k SF: 38,481,546 SF / 77.24% of total industrial
- 500k to 1M SF: 5,966,182 SF / 11.97% of total industrial
- > 1M SF: 1,475,667 SF / 2.96% of total industrial
- Class A: 11,738,707 SF / 23.56% of total industrial
- Class B: 30,197,021 SF / 60.61% of total industrial
- Class C: 7,240,725 SF / 14.53% of total industrial
Office Spaces with Retail
Total: 34,822,368 SF
By square footage range:
- 50k to 100k SF: 6,284,052 SF / 18.05% of total office with retail
- 100k to 500k SF: 17,831,521 SF / 51.21% of total office with retail
- 500k to 1M SF: 6,759,049 SF / 19.41% of total office with retail
- > 1M SF: 3,947,746 SF / 11.34% of total office with retail
- Class B: 404,480 SF / 1.16% of total office with retail
Employment in Los Angeles, CA
Historically, local administration, healthcare and higher education offices have been among the largest employment sectors in Los Angeles County. With regard to statistics about L.A.'s people, it's not easy to draw a line between City and County - a 2014 L.A. Times study showed that more than two-thirds of City employees live outside of it, mostly due to the continuous growth in residential rents.
With that in mind, the most recent official numbers put City, County and Federal agencies at the top of the list of biggest employers in the county.
- Administration/Public sector The City of L.A., County of L.A., LAUSD and State offices employ over 290,000 people in the area;
- Healthcare is next on the list, employing some 85,000 Angelenos. The top 3 healthcare employers are Kaiser Permanente, Providence and Cedar Sinai;
- Retail Los Angeles has the largest retail market in the country and this sector ranks 3rd as employment sector in the area. Among the top 10 biggest retail employers in L.A. are Target Corp., Kroger Co., Home Depot and American Apparel.
- Other top-ranking sectors are:
- Entertainment world-renowned and locally present in all its complexity, this industry generates over $120 billion annually in output, according to the LAEDC, and is one of the largest in terms of economic impact and jobs;
- Higher education UCLA, USC and CalTECH employ over 65,000 combined;
- Aerospace and Defense led by Northrop Grumman, Boeing and Lockheed Martin.
Overall, office-using employment in Los Angeles is strong and spread across various industries, from banking and finance, telecommunications, services and utilities to biotech and almost any other industry.
Education in Los Angeles, CA
The Los Angeles Unified School District is the second largest in the country. In addition, there are over 120 institutions of higher education in the county, among which are anchors like CalTECH, UCLA, USC, the California Institute of the Arts and Pepperdine University. This region is a major center for higher education, home to a wide array of specialized learning institutions.
Commuting Time in Los Angeles, CA
The traffic in L.A. is notoriously congested. Official stats calculate the average commute time at around 30 minutes but, by local’s estimates, that does not do it justice. The City has launched several initiatives that help residents get around more easily, whatever their choice of transport:
Over 500 miles of bikeways – see how you can join the over 19k people who bike to work by visiting http://bike.lacity.org/. All Metro Rail lines run regularly between 5am and midnight, seven days a week. See L.A. Metro’s routes and schedule here: https://www.metro.net/
Los Angeles Demographics
- Total Population3,949,776
- Male Population(49.5 %) 1,953,844
- Female Population(50.5 %) 1,995,932
- Median Age35.20
- Average Household Income$86,758
- Median Household Income$54,501
- Median Income Under 25$29,296
- Median Income 25-44$58,345
- Median Income 45-64$61,972
- Median Income Over 65$40,425
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SoCal Q3 2019 Office Market Report: LA’s Price per Square Foot Falls 15% Over Last Quarter, OC Returns to Highs
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