Southern California Investment Still Lags Behind Pre-Pandemic Levels

Apartments remain the favorite despite eviction moratorium


Southern California still has a ways to go before its real estate investment reaches the levels posted in 2019 before the pandemic hit.

Compared to the dark summer of 2020, regional investment volumes through July this year jumped 30 percent and surpassed $20 billion, according to data from CBRE and Real Capital Analytics. But that’s still below the $24.1 billion seen after the same amount of time in 2019. 

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And, worse, office and retail volumes are also down year over year, meaning those two sectors are faring worse this year than they did in 2020, when the pandemic nearly cut investment sales in half in Los Angeles County. 

Despite the strains caused by the eviction moratoriums — leading to lawsuits at the state and local level — as well as the billions in back rent owed to landlords, apartments are still the favorite asset class. Multifamily sales so far this year have more than doubled compared to last year, and the asset class makes up about 36 percent of all investment in Southern California, according to CBRE.

This mirrors the situation playing out on the national stage, where landlord groups are grappling with President Joe Biden’s eviction moratorium, while also seeing booms in investment.

​​Industrial transaction volume also remains robust. The first half of 2021 was one of the busiest in recent history for L.A., when just the second quarter saw 9.8 million square feet of space leased. Warehouses reached record-low vacancy rates at about 1.9 percent, which gets even lower in the three submarkets closest to the ports.

Despite the depressing showing from office and retail this year, the prices for both classes have remained relatively stable compared with other economic downturns, according to data from Real Capital Analytics. During the Great Recession, the price per square foot for office and retail assets across Southern California dropped 36 percent and 27 percent, respectively. That compares with a current decline of just 1.3 percent and 4.2 percent for office and retail in the wake of the pandemic. 

Gregory Cornfield can be reached at