Residential rents continue to fall across Los Angeles, particularly at the top end of the market.
Average asking rent for Class A properties that are new and loaded with amenities fell around 4.3 percent from March to last week, according to the Los Angeles Times, citing Costar data. Rents in two of L.A.’s pricey submarkets, Mid-Wilshire and Downtown, fell 10 percent and 8 percent respectively over that period.
At Class B properties, which are slightly older but have been renovated, were down around 2 percent from March.
Meanwhile, at Class C properties, which are older and have few amenities, prices were essentially flat, inching down 0.2 percent, the report found. But that could change. Rents for Class C buildings tend to decline later in a recession, RealPage chief economist Greg Willett told the Times.
At the top end of the market, the unique nature of the pandemic is accelerating declines, John Pawlowski with Green Street Advisors told the outlet. Many of the amenities and perks of living in a pricey Downtown apartment building don’t factor in now, such as easy access to bars and entertainment, as well as in-building perks like pools, all of which are closed.
“There is no good reason to sign a luxury lease right now in a city,” he said.
Despite the falling prices, it’s difficult to pin down how bad landlords are hurting. Some have reported moderate declines in rent collections, while others have seen significant drops.
Daniel Tenenbaum, founder of Pacific Crest Real Estate, said that his company has cut rents by as much as 6 percent in some buildings because tenants, particularly young service workers, were moving out, he told the Times. In some other buildings where tenants are staying, the firm has cut rent by around 3 percent. [LAT] — Dennis Lynch