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Multifamily Market Overview

West Los Angeles, CA

The West Los Angeles submarkets mainly consist of Century City West L.A., Greater Culver City, and Mid-Wilshire. These submarkets include some of the most prestigious areas and cities in the Los Angeles metropolitan area. West Los Angeles’s prominent location, strong employment drivers, local attractions, and central location makes the area appealing to tenants. As a result, rental rates in the metro are on the higher side compared to the national average. However, the West Los Angeles multifamily market has seen a dramatic improvement in all sectors of occupancy since the pandemic’s harshest effects.

 

Highlights

  • Sales volume in Century City West L.A. has been strong in recent quarters, and recent sales show that the submarket fetches some of the highest prices from apartment units in both the metro and the country.
  • Century City West L.A. vacancy, at 6.1%, is historically favorable and is in line with historical trends.
  • The Mid-Wilshire Submarket now has a 4.5% vacancy rate, representing historically excellent conditions.
  • Culver City has been a hotspot for apartment developers in recent years, with 1,500 units currently under development.

 

Rents | Vacancy | Construction

 

West Los Angeles is a submarket of the city of Los Angeles. While it is still tough to build in this region of town, planners in Los Angeles are more open to new construction than in neighboring communities.

 

Century City West L.A.’s vacancy of 6.1 percent is historically favorable, staying in line with the average of 6.2 percent for the last ten years. The Century City West L.A. area has asking rents of $3,280 per month, rents among the highest in the L.A. metropolitan area. Average asking rates have increased by 3.1 percent over the last year. In 2022, the Century City West L.A. submarket has seen 380 net new units come on the market. Currently, 1,300 apartment units are under construction in the submarket, accounting for three percent of the existing inventory. Mid-Wilshire conditions have weakened during the second half of 2022, with vacancy rising from a recent low of 4.1 percent in the second quarter of 2022 to 4.5 percent. The average asking rentals are up 4.3 percent compared to last year’s period. The average asking rent in the submarket is $2,670 per month, more than the metro average of $2,190 per month. In other words, despite its desirable location and reputation, rent growth in Mid-Wilshire has lagged behind the rest of the Greater Los Angeles apartment market in recent years. Only 210 new units were delivered in the Mid-Wilshire Submarket over the last year. Currently, 1,100 apartment units are under construction in the area, accounting for 2.8 percent of the existing inventory. In recent months, demand in the Greater Culver City area has slowed. Most of last year witnessed favorable renter demand, but the market also had 660 units built in the previous 12 months, causing vacancy to rise. At 4.7 percent, submarket vacancy is below historical averages, and the forecast is also optimistic, with vacancy predicted to increase only slightly. The submarket has asking rents of $2,760 per month.

 

Sales

Century City West L.A., by the numbers in the past 12 months

  • Absorption Units: 428
  • Units Delivered: 416
  • Average vacancy rate: 6.1%
  • Average asking rent: $3,280
  • Average price per unit: $670,000
  • Sales Volume: $439M

 

Mid-Wilshire, by the numbers in the past 12 months

  • Absorption Units: 127
  • Units Delivered: 211
  • Average vacancy rate: 4.5%
  • Average asking rent: $2,670
  • Average price per unit: $530,000
  • Sales Volume: $328M

 

Greater Culver City, by the numbers in the past 12 months

  • Absorption Units: 480
  • Units Delivered: 659
  • Average vacancy rate: 4.7%
  • Average asking rent: $2,760
  • Average price per unit: $560,000
  • Sales Volume: $300M

 

Century City West L.A. has a 12-month sales volume of $439M. Given the submarket’s prestigious position within the market, market pricing per unit is among the highest seen for L.A. submarkets, at $670,000 per unit. The average cap rate is 3.6 percent, which is lower than the metro’s average of 3.9 percent. Pricing per unit in Century City West L.A. is expected to remain flat in the short term. Mid-Wilshire has an average cap rate of 3.8 percent. Apartment investment activity in the Mid-Wilshire Submarket was solid in the past year, totaling $328 million, compared to the submarket’s 10-year annual average of $378 million. Apartment investment activity in the Greater Culver City Submarket was strong in the last 12 months, totaling $300 million, compared to the submarket’s 10-year annual average of $317 million. Given the submarket’s prime location in the metro, market pricing per unit in the submarket, $560,000/unit, is towards the top of the L.A. metro. The average cap rate is 3.7 percent.

 

Each of the submarket’s cap rates are below L.A.’s average of 3.9%, indicating less risk investing in West L.A.         

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