Latest Commercial Real Estate Market News & Investment Advice in Los Angeles

Improving Retail Sales Plus More Opportunities for Work and Business Expansion

March, 2022
by Karl Niehaus, President, CREI

Economic Overview:  

CA RAMPING UP BUSINESS BUT HAS HURDLES: CA’s 7.3% unemployment is substantially higher than the national average of 4.6%. Even with rising transportation costs, shortages of truck drivers, a strong dollar, and the ongoing pandemic, CA exported 4.5% more goods internationally than a year ago and this is also higher than in November 2019 (pre-pandemic). The confusing thing is that contrary to the 7.3% unemployment, there are over 1.2 million job openings, which means work is available. One of the big problems for CA labor supply is the high cost of housing, in both home prices and apartment rent, and this constricts labor supply. Median home prices have risen 16% from 3rd quarter 2020 to 2021 and these additional costs mean CA has more work than workers. We all want a thriving CA, but if housing is too expensive, which results in limited labor supply, the CA economy will continue to be hampered.   

Commercial Overview:

IMPROVING RETAIL SALES is good news for retail rents. As tenants perform better, demand for retail and what tenants can afford increases. Retail & food sales increased 3.8% month over month in January. This is particularly impressive considering January typically drops about 20% after holiday spending. The increased sales has also led to more leasing with LA county dropping to 5.2% vacancy and average asking rent increasing 0.6% to $2.83/SF.

← Return to Market News