Page 96 - AAGLA-FEB 2022

Member Update
ASome Final Thoughts on Closing Out the Year 2021...
By Elizabeth Reynolds, Reynolds Realty Advisors
s the second year of a “new normal” has come recovery. There has been a steady increase year over year in to a close, we want to take a moment and rental prices. Current prices are above 2020 and even 2019 reflect on what we, as a community and an numbers. The daily asking rate per square foot has increased industry, have learned, how we have grown, 6% since the start of the pandemic. This is a strong recovery and what we want to carry forward into the but lags behind the 11% we saw in previous years.
new year. Throughout 2021, we’ve seen our
staff, investors, clients, vendors, and partners face each day with:
Creativity
If we had to choose just one trait that embodied this year, creativity would be a strong contender. We’ve truly seen “if there’s a will, there’s a way” in action throughout the past 18+ months. While we hope there’s significantly less need for creativity in the new year, we are grateful and amazed by the creative ways we’ve seen investors diversify, our property managers attract tenants, and construction adapt to changing needs. We will be channeling this creativity to always better serve our community in the days, weeks, and years to come.
Kindness
In multifamily and commercial properties, there is an inherent sense of community– after all your tenants are literally neighbors. But the new ways we have seen communities of all kinds (vendor partners, owners, and tenants) pull together and the kindness they’ve shown is nothing short of inspiring. As the world continues to change in the next year, leading with kindness is a lesson, and a practice, we will carry on.
Passion
There is no doubt that throughout last year, our industry faced very difficult challenges. In addition to the regular difficult parts of the job, we’ve had to navigate eviction moratoriums and changing legislation. And through all these challenges, we’ve all worked with resilient passion. At the end of the day, passion is what drives us and, here at RRA, we are excited to enter a new year with renewed passion.
And since we wrapped up the year, let’s look at some of the local market insights and opportunities for multifamily and commercial properties. (Numbers and statistics are as of third quarter of 2021.)
Los Angeles
Overall, the Los Angeles market has seen a very strong
Another trend we’ve seen continue to develop is the strength of the affordable housing market. Affordable housing saw less of an impact throughout the pandemic and has seen a faster recovery than four- and five-star communities. This tracks with the changes in tenants’ desire for more space between neighbors and an increased need for space as the home became an office, schoolhouse, and gym as well. The village and tower style living became less popular during the pandemic and many people gravitated to older, more spacious buildings.
With a massive increase in job growth, in both the Los Angeles Area and the nation, the future is looking very strong. The Los Angeles Area is currently the second largest metropolitan market in the nation. Currently there are 25,000 new units under construction and the sales volumes of apartment properties reached $10.5 billion. In addition, the average market pricing for apartment properties, $390,000 per unit as of third quarter, is well above the national average of $230,000 per unit.
Conclusion
The year 2021 has given us many lessons on our outlook and investments. The past two years have clearly demonstrated that when the market is down, apartments are in high demand and industrial units are consistently strong. So, as we go forth into the coming years, keep in mind that multifamily and industrial properties are great, low-risk options for your portfolio. However, each investor and each portfolio have thier own goals and strategies.
96 FEBRUARY 2022 • WWW.AAGLA.ORG
The author, Elizabeth Reynolds, is the Founder and Chief Executive Officer of Reynolds Realty Advisors, which provides property management services throughout Southern California. Data and analysis provided in this article is courtesy of Co-Star database. This material should not be relied upon for predictions of future results but to provide you with background, information, and education. For more information, go to www.ReynoldsRealtyAdvisors.com.