Los Angeles: Full of Booming Opportunity Zones

One of the Top 10 Opportunity Zones in the United States

Los Angeles has been coveted as one of the top 10 opportunity zones to invest in throughout the United States. Downtown and South Los Angeles both received the recognition, largely due to growing real estate prices. From 2013 to 2018 in Downtown LA and LA’s Art District, real estate prices have increased by 30%. On top of that, the area has roughly 25% of multifamily property and 50% of commercial space, creating an investment synergy for investors to combine with QOZ benefits!

Los Angeles’ Regional Connectivity and Housing Needs Positions the City Well for Growth

In terms of geographic location, it really doesn’t get much better than Los Angeles – it isn’t a coincidence that much of California’s economy is made up by the city. Opportunity Zones within Los Angeles county account for 11% of the population and have wide ranging median household incomes, with a low of $9,200 and a high of $100,000.

Los Angeles boasts an abundance of traffic and visitors to their economy yearly, with multiple airports, ocean ports and railways. As we covered in some previous articles, economic stimulation within opportunity zones often overflows out to the surrounding communities; thus, the continued economic prosperity and growth within Los Angeles will benefit investors even further. The City of Los Angeles reports 34,000 homeless individuals, highlighting the need for investment in affordable housing developments and investment.

Combining these two factors results in an environment ripe for investment within their Opportunity Zones – Los Angeles is arguably one of the best QOZs to pursue investment in, at the moment.

LA Seeing Hundreds of Millions in QOZ Investments Already

Major investors and businesses are already acquiring property within Los Angeles Opportunity Zones, spending hundreds of millions on properties and stimulating the economic environment. Below are a handful of recent, notable transactions.

• Access Industries Purchased 777 South Santa Fe Avenue for $193.5Mn
  Access Industries, the parent company for Warner Music Group, acquired the 259,000 square foot building and will relocate their West Coast headquarters to the building. While the company notes that the Opportunity Zone designation is the sole purpose of the investment, it certainly bolstered their decision. 

• Starwood Capital Purchased 550 South Palos Verdes Street for $109.97Mn
  Starwood Capital tapped into their $500Mn Opportunity Zone fund to purchase the above property for roughly $110Mn. The group noted their intention of turning this property into a seven-story multifamily building – they expect continued economic growth within the investment region. 

• Slate Property Group Purchased 1241 Vine Street and 1665 North Sycamore Avenue for $39.25Mn
  Slate Property Group, a New York based firm, purchased these two multifamily properties within a qualified opportunity zone in Los Angeles. Both buildings are rent-controlled and will be great investment properties for the Property Group!