California + Los Angeles + Apartments | January 17, 2019

Institutional Investors Still Favor L.A. Multifamily

By Dennis Kaiser

JLL recently expanded its multifamily team in SoCal with the addition of Chris Benton as SVP. Connect Media asked the veteran commercial real estate advisor for insights into why the Los Angeles multifamily market continues to be targeted by institutional investors as they expand and manage their portfolios. Here are Benton’s thoughts in our latest 3 CRE Q&A.

Q: How will the state of institutional investment in the L.A. multifamily sector differ in 2019?
A: There will be a lot less hesitancy now that Prop 10 has been defeated. Investors were very tepid in the second half of 2018, as the vote got closer and closer. Rent control still looms large in California, but how it will be enacted is yet to be seen and not in the immediate future.

Q: What trends are you seeing in L.A. multifamily investment?
A: There is an influx of capital to the tech-centric job locales, namely Hollywood and Silicon Beach. In the past week, several tech firms have announced huge lease deals, making those areas even more desirable for investment. The disparity of renting and owning is still immense in those markets.

Q: How is the influx of new development impacting the L.A. investment market?
A: The pipeline of new apartments coming online is still massive, however certain markets are better suited to absorb those units than others. Downtown L.A.’s new units were absorbed at a much faster rate than anyone could have predicted, with vacancy compressing by 30 bps in 2018 to just 3.8%. With Y-O-Y rent growth of 6% in 2018, the downturn most were planning for in DTLA never came. West LA will have quite a few deliveries in 2019, however the area has been drastically underserved in the luxury rental market, so I believe those units will be snapped up quick.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.