Los Angeles Investment Trends

• Attracted to L.A.'s robust historical rent growth and high barriers to entry, institutional investors and REITs have driven 40% of acquisition volume in the market over the past three years, up from 30% in the past decade. User acquisitions have fallen to 11% of sale volume in the past three years from 16% in the past decade, while private investors and private equity funds have also lost some market share, driving just under 50% of buyer volume. Private owners and users have divested on net over the past decade, while institutional investors and REITs have expanded ownership in the market. Rexford, CenterPoint, Invesco, and Prologis are among L.A.'s top industrial buyers over the trailing year, joined by Irvine-based Greenlaw Partners. Duke Realty, Blackstone, and BlackRock are the leading sellers. Elevated capital costs, softer market fundamentals, and the recently enacted ULA transfer tax on deals exceeding $5 million led to a 40% decline in sales volume in 2023, to $5.3 billion from a record $9.3 billion in 2022. Sales volume is on a similar, if not weaker, trajectory in 2024, with $3.1 billion trading in the first three quarters. The median price for logistics (warehouse and distribution) buildings traded in institutional-sized transactions over $10 million averages around $330/SF in 2024, up slightly from 2023 but still down over 10% from 2022. Among all sized deals, pricing of logistics properties averages $300/SF over the trailing year, while specialized (largely manufacturing) properties have traded for $280/SF and flex buildings have traded for $400/SF.