Q&A: Inland Empire Rent Growth with Alex Mogharebi
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By Dennis Kaiser
The Inland Empire multifamily market is exhibiting the strongest rent growth across SoCal. Connect Media asked one of the market’s top investment brokers, The Mogharebi Group’s Alex Mogharebi, to share what’s behind that growth, advice he has for investors and what he sees ahead. Here’s what he had to say in our latest 3 CRE Q&A.
Q: What are the biggest drivers contributing to that growth?
A: The Inland Empire’s strong rent growth has been driven by increased demand from new residents who have been priced out of the coastal markets, and new household formation from existing residents, coupled with strong wage and job growth. Over the last year, this market has seen an impressive reduction in the unemployment rate, outpacing national and state trends. New jobs have been fueled by the construction sector that has grown about 8% year-over-year. This growth has primarily been driven by continued investments in the logistics sector.
Q: What advice do you have for multifamily investors interested in the Inland Empire, given the current market fundamentals?
A: Investors should look at submarkets along public transit expansions into the Inland Empire. These extensions are making those areas more attractive to commuters. The Gold Line extension will serve the Pomona Valley, and offer residents a 75-minute trip from Montclair to Downtown L.A. The recent Perris Valley extension is estimated to have created over 4,000 new jobs. The most affordable areas of the Inland Empire, including San Bernardino, Perris, Hemet, Lake Elsinore, Desert Hot Springs, Coachella, and Indio, have recently experienced robust growth that is expected to persist through the near future.
Q: What type of opportunities does the Inland Empire multifamily market offer investors? Should they wait to invest, or is there still room to capture good deals? What should they watch out for?
A: Demand for new apartments continue to outpace supply, thus rents are expected to continue their upward trend. The most affordable regions are the best positioned to provide strong rent growth due in part to the minimum wage that is structured to increase at over 5% per year through 2022. Investors should invest in these areas to take advantage of the income growth and lock a low interest rate. For instance, we are seeing some opportunities in select submarkets to get newer buildings at well below replacement cost, while still having upside in rents.
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.
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