Multi family Construction

• During the past 12 months, about 1,100 net new apartment units delivered in the San Gabriel Valley Submarket. In 24Q3, Mill Creek Residential completed Modera Pomona, a 210-unit community. 24Q2 saw the completion of one of the five largest apartment communities in the submarket, Alexan Marmont. Trammell Crow Residential was the developer of the 436-unit community. The community is adjacent to the Metro L Line Monrovia Station and is representative of the increased prevalence of transit-oriented, multifamily projects in the area. The current construction pipeline comprises around 1,700 units, which will increase the unit count in the submarket by 2.5% once all developments finish. While levels have come down from around 2,900 units in 24Q1, current activity still makes it one of the more active areas in Greater Los Angeles for multifamily development. The San Gabriel Valley Submarket has the third-most number of apartments under construction among submarkets in the L.A. metro, only behind Downtown Los Angeles and Koreatown. Monrovia has two of the larger developments underway. Jefferson Monrovia, a 296-unit development by developer JPI/TDI just south of the Metro L Line Monrovia Station, is the largest project in the submarket and will finish early next year. Monrovia Station is a 256-unit project just north of the Metro L Line Monrovia Station. Adept Development, the developer, will open the property in the middle of 2025. The San Gabriel Valley Submarket is the largest in the L.A. metro, with around 69,000 market-rate units. Lower-to-middle-quality properties make up the majority of units. Around 70% of units are rated 1 & 2 Star, and around 25% are rated 3 Star. About 5% of apartments in the submarket are rated 4 & 5 Star compared to about 10% across Greater Los Angeles.

Multi Family Rents

• Average asking rents in the San Gabriel Valley Submarket witnessed gains of 1.7% during the past 12 months, outpacing changes of 0.5% experienced across the L.A. metro. However, in recent months rents have been moving sideways. The area has also seen outsized rent growth over the longer term, with average yearly gains of 4.0% during the past 10 years, besting growth of 2.9% experienced across the Greater Los Angeles apartment market. Other relatively affordable and more suburban submarkets in Greater L.A. have also seen relative outperformance. Average asking rents in the San Gabriel Valley Submarket, $2,040/month, are around 10% less than the market-wide average of $2,290/month. Properties rated 1 & 2 Star, which have around 70% of the submarket's units, have average rents of $1,750/month, slightly less than the 1 & 2 Star market-wide average of $1,780/month. Properties rated 3 Star, which have about 25% of the area's units, have average rents of $2,310/month, about 5% below metro-wide 3 Star averages. 4 & 5 Star units have average rents of $2,830/month, almost 15% less than the Greater L.A. 4 & 5 Star average of $3,260/month.

Retail Construction

• The Eastern SGV Submarket has seen limited new retail space added in recent years. During the past five years, total square footage decreased. While 110,000 SF of new space was added in this period, 340,000 SF of retail inventory was demolished, as developers and owners saw opportunities to reposition properties and sites for other uses. Recent deliveries have primarily comprised smaller standalone buildings or shopping centers. The most notable recent completion was a Mazda auto dealership in Claremont that opened in mid-2022. The auto dealership replaced an obsolete 18,000-SF storefront property that had been vacant for over a decade. Among the most significant developments under construction is the Rowland Town Center, a 96,500-SF lifestyle center on Gale Ave. just west of Nogales Street. Good Fortune Supermarket will anchor the project, and Wushiland Boba has also preleased space. Rowland Town Center will complete in the coming months. At 2539 E Garvey Ave. in West Covina, a 42,500-SF center is underway that will soon complete. The project is on the site of a former Mazda auto dealership.

Retail Leasing

• The Eastern SGV Submarket has seen retail vacancy, presently 4.9%, move sideways for two years. The current vacancy rate is less than the market-wide retail average of 5.6%. During the past several years, demand has been more robust for neighborhood centers, whereas malls have underperformed the rest of the market. Restaurants and other food service places have been active recently. Golden Corral leased 13,500 SF in April at 1459 N Citrus Ave. in Covina. In February, My Guy Collectibles leased 3,000 SF for two years at Grand Avenue Plaza strip center in Covina, paying $1.23/SF per month on a modified gross basis. The Eastern SGV Submarket comprises a collection of suburban cities and neighborhoods east of I-605 and north of Orange County. Three freeways heading west connect the submarket to Downtown Los Angeles, with work-hour commute times in the 60-to-90-minute range. Several transport-oriented housing developments near rail and bus stops have opened in recent years. Otherwise, limited housing construction and population growth reduce the need for additional retail space.