Michael Arnold is a Los Angeles real estate expert specializing in commercial properties who speaks to the importance of keeping up with recent developments within his space. He acknowledges that the commercial real estate industry has made a variety of adaptations within to address the diverse needs of individuals and businesses and, here, he explores a few recent trends defining current practices in the area.
Redefining Office Space Remains Crucial to Businesses Across Industries
In the early stages of the pandemic, offices stood out as one of the most impacted facets of the commercial real estate industry. Vacancies soared in key areas throughout Los Angeles and beyond as remote work schedules were implemented to keep workforces safe.
Now, there has been a growing push to get workers back in the office for reasons such as creating and maintaining company culture, assisting with business communications, and increasing productivity. To this point, several businesses have been faced with the challenge of redefining office space to make a return to the office more comfortable— and enticing— to their employees.
Michael Arnold upholds Los Angeles’ real estate market is reflecting this change through companies choosing to lease and purchase spaces that feel inherently more inviting. We are currently seeing an uptick in companies choosing spaces that have great access to natural light, high ceilings to make workspaces seem larger, multi-use spaces, as well as a variety of amenities. According to Michael Arnold of Los Angeles, to arrest the attention of top talent is to address what they are looking for in both office spaces and company culture and act accordingly.
The Multi-Family Market Booms in LA County
The multi-family market within Los Angeles has had great showing when compared to other types of commercial property post the early days of the pandemic and recent finding have found that this is still the case. The multi-family market has seen a huge boom recently, spurred by factors such as the high demand compared to supply, the rising population in key areas throughout the area, and the profound shortage of affordable housing. Michael Arnold notes Los Angeles real estate is expected to see rent and property value increases as the bubble continues to grow as well, which may be a point of celebration or contention depending on where you fall on the spectrum.
For investors with capital to spare, this is boom is a great sign because they can focus on acquiring properties to make the market work in their favor. This is similarly the case for those selling, who may also stand to make a profit as these investors explore purchasing their properties to expand their portfolios. For residents, the boom in the multi-family market spells a competitive market for most as they contend with potential rent increases and more people in search of housing in the city. How this pans out for low-income tenants most impacted by this market growth has yet to be seen, but experts note that we will have a clearer picture when eviction moratoriums end.
Retail Markets Remain Stable but Vary Depending on Location
Compared to some of the nation’s retail markets, Los Angeles has handled the impacts of COVID fairly well and appears stable at this time. To Michael Arnold, Los Angeles’ real estate market for retail properties in key areas largely seems to vary from neighborhood to neighborhood, with some proving to be stronger currently than others.
For example, some of Los Angeles’ metro markets were profoundly impacted by the pandemic, leading to a variety of neighborhoods having a negative absorption. While experts have had varying perspectives as to why this is the case, some uphold that it is due to the high rents and some businesses’ inability to attract enough clientele to store fronts to keep up.
In suburban neighborhoods throughout the LA area, experts are noticing that several markets are thriving in part because of their investment in more master-planned, family oriented neighborhoods. This empowers them to perform well with street retail and strip centers.
Another factor to consider within the realm of retail is that we can expect to see older retail that currently stands vacant be utilized for adaptive re-use to create mixed-use environments, housing, and other properties depending on the needs of the areas in question. Mixed-use properties are seeing an increase in popularity in part because residents enjoy the convenience and access that it provides. Michael Arnold of Los Angeles maintains that arresting the attention, and business, of residents through multi-use locations can have a large impact on areas’ ability to keep retail markets strong.
Industrial Real Estate Market is Going Strong
Together, the Ports of Los Angeles and Long Beach combine to form the third largest port complex in the world and up about forty percent of US goods are shipped into the area. To Michael Arnold, Los Angeles can arrest the business of a variety of industries based on this fact alone and the industrial real estate market is certainly going strong.
Real estate experts find that there has been a notable increase in demand for industrial real estate in the LA area and direct vacancies remain low at the time. Michael Arnold notes that we are also seeing new construction in the area as older buildings are demolished to address the facility needs of businesses interested in securing property. Those watching the Los Angeles industrial real estate market can expect that already high demand will continue to increase into the foreseeable future, spurring competition for industrial land spanning industries.
Looking to the Future of LA Commercial Real Estate
Michael Arnold notes Los Angeles real estate, by and large, appears to be bouncing back impressively since the onset of the pandemic years ago. He offers the caveat, however, that it is important for individuals putting large stake in the current conditions to keep up to date with developments as best they can. Reason being real estate is a constantly evolving landscape and things can certain change depending on a host of factors.
When considering the future of commercial real estate in LA, we can expect that prices will remain high in the most sought after areas and in key niches within the space. According to Michael Arnold, Los Angeles will arrest the attention of key players within the real estate market who have the capital to facilitate big moves just as it always has. Still, investors, buyers, and sellers can leverage their opportunities to make the best choices possible for their existing situations by being mindful of shifts, recent developments, and insights from industry veterans.
