Los Angeles Market Report
Hard Hit by Health Crisis, Los Angeles County Enters Transitional Period for Commercial Real Estate; Attractiveness of Suburban Investment Grows
Span of strong commercial performance interrupted by wave of job losses. Shelter-in-place orders and nonessential business closures that ex-tended through the second quarter had a profound impact on Los Angeles County’s economy and commercial real estate sectors. During the three-month window, nearly 470,000 jobs were lost in the metro, raising the local unemployment rate to a national high of 19.4 percent in June. The leisure and hospitality, and retail trade sectors were hardest hit during this span, accounting for nearly half of the slashed positions. The number of traditional office jobs in the county also plummeted by nearly 120,000 in the second quarter. Together, the combination of prolonged stay-at-home mandates and widespread layoffs disrupted demand across property types, reversing recent vacancy and rent trends while also creating uncertainty surrounding the metro’s sizable construction pipeline.