Hollywood and its entertainment machine regularly echo through Commercial Observer’s list of most powerful real estate players in the Los Angeles area. But, today, those treasured soundstages and studios that have long defined Los Angeles are empty. The effects of the ongoing labor disputes between actors, writers and massive conglomerate-level production companies — such as Commercial Observer Read More Channel, Features, More, Power LA 2023, Los Angeles, 3650 REIT, Acore Capital, Alagem Capital Group, Alexandria Real Estate Equities, Amazon, AvalonBay Communities, BentallGreenOak, Blackstone, Cain International, CBRE, CIM Group, Colliers, Cushman & Wakefield, Disney, Eastdil Secured, Equity Residential, Hackman Capital Partners, Irvine Company, Jamison Properties, JLL, JPMorgan Chase, Kroenke Group, Newmark, NewMark Merrill, PGIM Real Estate, Prologis, Prudential, Rexford Industrial Realty, Thorofare Capital, TIAA
But, today, those treasured soundstages and studios that have long defined Los Angeles are empty. The effects of the ongoing labor disputes between actors, writers and massive conglomerate-level production companies — such as Disney, Warner Bros. and Comcast — are raising new questions about the longevity of demand, especially considering the unprecedented surge in studio development projects currently in the pipeline.
And it’s not just show business: Hotel workers, thousands of city and county workers, and more have mobilized picket lines at some point this year. Still, the empty soundstages and picketing celebrities will be the most identifiable story of 2023 locally.
Of course, on top of that, offices and some major shopping centers are extraordinarily quiet, too, these days, without any sort of labor strike. The effects of rising interest rates, a new transfer tax in L.A. for pricier sales, and all the other headwinds are hitting L.A. as hard and sometimes harder than anywhere else in the country.
There are anchor tenants ditching office towers, as well as institutional property owners handing over the keys to landmark high-rises to their lenders. In fact, Southern California has seen the sharpest declines in office values in the nation this year. The few towers that are sold are traded for major losses. And some of the most troubled assets in L.A. have quickly become the go-to examples around the country to epitomize the generational decline.
Thankfully for the industry, behind the scenes, Southern California remains the biggest and busiest industrial market in the nation. Amid the aforementioned slowdown, it appears industrial is the safest bet among the major asset classes.
Rather than decline, the market for logistics and warehousing space is plateauing, or “normalizing” as CEOs like to put it. But, indeed, the biggest commercial real estate deals in the region moneywise are industrial sales and financings. That’s why the easiest honorees to select for the Power L.A. list this year were the likes of Rexford and Prologis (PLD), which are still expanding via nine-, 10-, and even 11-figure investments.
Otherwise, amid the economic sea change, this list showcases the durability of housing and the biggest multifamily landlords much more so than in years past. With the lack of hope for any resolution to the housing crisis in the nearterm — in a L.A. County where most residents are renters — there’s no question apartment landlords have stability others pine for.
But perhaps the honoree most emblematic of the state of the market is Jamison Group (which owns the fifth most rental units in the city of L.A.). The private, L.A.-based development firm has been converting underperforming office space into residential properties since well before the pandemic and the new era of remote work. Seems pretty advantageous now, doesn’t it?
Reporting by Greg Cornfield. Additional reporting by Tom Acitelli, Rebecca Baird-Remba, Andrew Coen, Cathy Cunningham, Chava Courarie, Max Gross, Mark Hallum, Abigail Nehring, Brian Pascus and Nicholas Rizzi.
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
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