Page 93 - AAGLA-MAR 2022

Member Update
A Final Look at 2021: A Historic Year
By Jordan Brooks, Senior Market Analyst, ALN Apartment Data
fter a rough 2020, the year 2021 brought net absorbed units, and the 3,600 net absorbed units in the its own challenges for the multifamily Hollywood – Silver Lake area led all submarkets. The Tustin housing industry. And yet, at the national – Irvine region was the only other to manage a net gain of level, the year also brought record at least 2,500 newly leased units with just over 2,600. Only apartment demand and rent growth not three submarkets suffered a net loss in rented units for the seen in at least a generation. Even as year, and none lost more than the 200 or so units in the Mid- portions of California struggled relative Cities East area.
to the national averages, the Los Angeles metro area was an example of a market that mirrored the country as a whole quite closely.
All numbers below will refer only to conventional multifamily properties of at least 50 units. Geographically, the Los Angeles – Long Beach – Anaheim metropolitan statistical area (MSA) will be covered.
New Units and Net Absorption
More than 10,000 new units were delivered
across the Los Angeles metro area, a small
increase from 2020 and right around the
annual average established from 2018
through 2020. The delivery activity was
most focused in the Mid-Wilshire – Central
Los Angeles submarket, an area that saw
more than 3,000 new units introduced
during the year. Other areas with notable
new supply included the Brentwood
– Westwood – Olympic Corridor and
Woodland Hills – Canoga Park submarkets
with each adding approximately 1,000 new
units. In all, 60% of the 32 ALN Apartment Data submarkets for the Los Angeles metro area saw some level of new supply in 2021.
Whereas new supply was roughly in line with recent years, apartment demand was decidedly not. Net absorption of about 29,000 units during the year was third-most in the nation behind Dallas – Fort Worth and Houston, and was also more than in 2018, 2019, and 2020 combined for the area. The Greater Downtown submarket, with about 4,100
The demand picture was quite different from 2020 from a price class perspective as well. Net absorption in 2021 more than tripled that from 2020 in both the Class A and Class B subsets with a net gain of more than 9,000 leased units for each. For Class C and Class D properties, the story was negative demand flipping back into positive territory. Class C properties shed almost 800 net leased units in 2020, and
for Class D the retraction was by about 300 net units. In 2021, net absorption was positive by about 4,600 units and 1,200 units for each of those subsets respectively.
Average Effective Rent and Lease Concessions
The combination of a typical level of new supply and much higher than normal apartment demand fueled double-digit annual rent growth for the Los Angeles metro area as a whole.
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