The Los Angeles investment market sees a rampant decrease in sales volume across multiple product types

Los Angeles has witnessed significant impacts on its major sales markets due to the economic aftermath of the post-COVID-19 pandemic and concurrent interest rate hikes. Across all property types, there has been a notable slowdown in sales volume, with the office sector bearing the brunt of the downturn. A noteworthy observation is the inverse relationship between sales volume and price per square foot.

While retail traditionally exhibits lower sales volume on a quarterly basis, it currently boasts some of the highest price per square feet seen in the last 20 years. This trend can be attributed to investors and owners shifting their focus away from office buildings, displaying pessimism towards their viability, and instead channeling capital into more resilient property types such as retail and industrial capital markets. Furthermore, there exists a direct correlation between leasing activity and sales volume.

Product types characterized by high vacancy rates and low leased square footage, such as office spaces, are witnessing historically low sales volume and values. This phenomenon is primarily due to owners opting to retain assets until market conditions improve before bringing them to market for sale.