As one of the 50 largest cities in America, Long Beach is a major population and employment hub located in L.A. County with strong rental demand. Long Beach is home to the Ports of Los Angeles which is a key channel of nearby employment and global supply chains. The submarket has experienced robust construction activity in recent years, primarily focused in the Downtown area. The development of new housing projects will help keep up with the demand of affordable housing units for renters planning to reside in the extremely desirable Long Beach multifamily submarket.
Let’s look at a few key factors for the Long Beach, CA multifamily submarket industry.
After seeing a spike in vacancy in the first half of 2020, current vacancies in the Long Beach/Ports Submarket are now at 2.9%. The outlook for occupancies looks favorable, with submarket vacancy remaining below historical and metro-wide averages. Despite the 1,500 additional units under construction, the forecast for tenant demand is favorable for landlords and should keep vacancy from rising considerably throughout the next several years.
The average rent in Long Beach stands at $1770/month and provides tremendous value to tenants who desire to live in affordable coastal communities located in Southern California. Average asking rents have increased 6.4% over the past 12 months and are forecasted to increase marginally through the end of the year.
The Long Beach submarket saw an impressive investment activity of $1.1 billion spread out over the past 12 months. The average cap rate is 4.2% and the market pricing per unit, $330,000/unit, is almost 20% below the L.A. metro average. The substantial discount in pricing is driven by the submarket’s location, removed from many of L.A. County’s key job centers. Looking ahead, investor demand will likely remain strong, given expected favorable market conditions and the average market pricing is anticipated to continue to see substantial growth.
Cash will continue to be king and at Fidelity Bancorp Funding, our Bridge Loan program is designed to help you present yourself as an all-cash buyer in this competitive market. Through our bridge program you are guaranteed to close quickly and with a flexible lending process. FBF lends in all states, $1M-$50M, up to 75% LTV with 36-month terms Interest Only, and no pre-payment penalties.
Are you thinking of investing in multifamily? We might be just the leverage you need to get the deal done! Reach out to our team at firstname.lastname@example.org or call us at (714) 908-5100.
*All data and figures sourced from CoStar report on Multifamily Submarket – Long Beach/Ports