Dear Friends and Family,
As we close out the year and look toward 2021, we reflect on some of the important trends that the COVID-19 pandemic has brought to housing and our working habits. Multifamily investors and developers are shifting strategies for the new year, as Los Angeles remains steadfast in its efforts to protect renters from eviction. With the promise of a vaccine on the horizon, foreign investors look to put more money into U.S. multifamily properties. Finally, we look ahead at several projects unfolding around L.A. that aim to restore urban activity in the post-pandemic era.
The Multifamily Industry Preps for Permanent Remote Work
Growth of the remote work market segment will trigger several new trends in multifamily. Research from Newmark found that multifamily owners are increasing floor plans from a standard of 65 feet to 75 feet to create more flexible spaces, such as units that feature one-bedroom plus a den. According to the survey, 14% of current apartment units are being reworked to better accommodate work-from-home needs and developers are adding more outdoor space with balconies to meet the needs of workers that stay home.
How 2020 Changed the Way Multifamily Owners and Developers Plan for 2021
Though the sector has done fairly well through the pandemic, especially when compared to retail or hotel properties, the uncertainty that defined much of 2020 is exerting a big influence over decisions multifamily owners and developers are making for the coming year. For some Southern California multifamily owners, a lot of the uncertainty comes from not knowing whether local eviction moratoriums will be extended or for how long. Though there are surveys, trackers and data sets that offer estimates of how many tenants are paying rent — and usually find above 90% collections — there are no definite numbers.
International Investors Have Sights Set on U.S. Multifamily Deals
The chaos caused by the spread of the coronavirus did not stop foreign investors from buying apartment properties in 2020 … though it did slow them down. International investors spent $5.3 billion to directly purchase apartment properties in the U.S. between the beginning of the year and early December, according to JLL Capital Markets. That’s a lot less than the $11.1 billion they spent over the same period in 2019. But it’s not such a sharp decline compared to other types of real estate investments. “Given the current market dynamics, multifamily has held steady and is doing relatively well when compared to other asset classes,” says Roberto Casas, senior managing director in the Dallas office of JLL Capital Markets.
7 Must-Watch Projects Opening in SoCal in 2021
Despite all the year’s hurdles, there are still projects opening across Los Angeles: apartments, cultural institutions, mixed-use complexes. This mix of seven projects across the city with anticipated openings in 2021 includes adaptive reuse, ground-up construction and museums. It provides a snapshot of some of the things to look forward to in the coming year.