The city of Los Angeles continues to be one of the most expensive places to rent an apartment. In fact, it ranks as the tenth least affordable market out of 50 major metropolitan areas. This is according to the latest report from Zillow Research, which analyzed data from the National Association of Realtors.
Renting costs averaged $2,054 per month. While this is still lower than the national average ($2,093), it is well above the median cost of $1,664. Home ownership costs are even more prohibitive. A single family house in Los Angeles sold for nearly twice what renters pay monthly.
Despite the challenges with affordability, there is evidence that the rental market is heating up. Vacancy rates dropped to 5.8%, the lowest since 2012. At the same time, multifamily development activity increased dramatically. There were over 14,000 units under construction in California during the fourth quarter of 2018 alone.
We believe that this trend will continue into 2019, and we see a robust demand for apartments across Southern California. We expect high demand to persist despite the lack of inventory, and we anticipate a tight supply/demand balance throughout 2019.
Aimco, or Apartment Investments Management Co., is among one of the largest owners and operators in the United States. Founded in 1989, it manages over 20,000 apartments across 14 states. The company operates in four segments: Apartments; Retail; Residential Mortgage Services; and Property Management. Its properties include single family homes, condominiums, townhomes, multi-family housing and commercial real estate.
9. Carmel Partners
Carmel Partners is a San Fransisco-based real estate investment fund focused on acquiring multifamily assets nationwide. Its national portfolio consists of approximately 10,700 units and its Los Angeles holdings include 7,300 units across six buildings.
The firm acquired four apartment communities in 2017 — one each in Southern California, Chicago, New York City and Washington, D.C. — bringing its total number of acquisitions to nine since 2016.
With plans to invest $1 billion over five years, the firm intends to expand into a handful of markets outside of its core areas of focus. In addition to its current locations, it has identified Atlanta, Las Vegas, Phoenix and Seattle as potential expansion targets.
In 2018, Carmel Partners partnered with Greystar to manage three of its projects. The companies formed a joint venture called Carmel Partners Management LLC, which manages the firm’s seven properties including its newest acquisition, a mixed-use development in Santa Ana, Calif., called Cumulus Transit Mixed Use.
8. Prime Group
Prime Group is a leading real-estate equity, debt and investment firm based in New York City. Founded in 2000, the firm focuses primarily on acquiring, developing, managing and financing high quality residential properties throughout North America. In addition to owning just one property, it manages three others.
The developer purchased the land for $60 million in 2004, and spent another $100 million building the project. A few months ago, the firm sold off some of the apartments for about $1.5 billion.
7. Jamison Properties
Based in Los Angeles, the company owns 20 properties across the region, including four in South Korea, one in Shanghai, three in London and 12 in California. In addition to the above projects, it is planning on developing a 644-unit project called 2908 Wilshire Boulevard. The property will be the firm’s biggest in the area, according to the company.
The firm is also looking into several other multifamily developments in Los Angeles, including the Hollywood Cherokee development, whose plans include 644 apartments.
6. Goldrich & Kest
Goldrich & Kest is one of the largest real estate companies in Los Angeles County. Its portfolio includes more than 5,100 apartment homes across 36 communities in California and Arizona. The company owns and operates rental housing in the San Fernando Valley, Westside, Hollywood Hills, Santa Monica Mountains, Orange County, Riverside County and Ventura County.
The company’s mission is “to provide residents affordable quality living.” To achieve this goal, it offers a wide variety of options, including studios, one-, two- and three-bedroom apartments. Rents range from about $900 per month for studio apartments to more than $5,000 per month for larger ones.
5. AvalonBay Communities
Halfway through the list, there’s one name that stands out above the rest: AvalonBay Communities. The REIT, based in Santa Monica, California, has been around since 1983, and it’s now worth over $3 billion. In 2017 alone, the company sold off nearly half of its stock, and it continues to make money hand over fist.
The firm operates in three main areas: commercial real estate, residential real estate, and mortgage banking. AvalonBay owns thousands of apartment buildings across the United States, including some big names like the Westin Bonaventure Hotel & Suites in downtown Los Angeles.
In addition to owning large swaths of land throughout Southern California, AvalonBay also owns a few smaller communities, including Phillips Ranch, a neighborhood located just outside of Beverly Hills. The community consists of about 500 luxury apartments and townhomes, and rents average $1,700 per month.
4. GH Palmer Associates
GH Palmer Associates owns over 6,000 units throughout the greater Los Angeles region, including several high-profile communities such as The Lorenzo, The Ferrante, and The Hacienda. The company operates out of Beverly Hills, California, and specializes in residential properties in the Greater Los Angeles Area.
The company’s portfolio includes approximately 2,500 apartments and condominiums across six distinct neighborhoods, ranging from upscale to mid-range markets. These include The Hacienda, The Lorenzo, The Ferante, The Palms, The Villas at The Cove, and The Village at Westlake Park.
3. Los Angeles Housing Authority
One of the largest providers of low income housing units in Los Angeles and one of the nation’s leading public housing authorities, LAHA operates more than 10,000 units across the city. As part of its mission to provide safe, decent and sanitary homes for families at fair market rates, the authority provides rental assistance to eligible households.
The authority owns and manages nearly 7,300 units throughout the county, including over 5,600 that are fully rent-restricted. These include single family homes, duplexes, triplexes, fourplexes, and sixplexes.
In addition to providing affordable housing, the authority also oversees the development of affordable mixed-income communities that offer quality living options for residents. In partnership with local governments, nonprofit organizations and philanthropic foundations, the authority works to build and preserve affordable housing while creating opportunities for homeownership.
2. Essex Property Trust
The REIT owns about 63,000 units nationwide and 8,300 units within Los Angeles. Its holdings include 32 properties spread out throughout different areas of the city. Half of the communities are considered luxury, with the most pricey located in downtown. One, Two and Three Bedroom Apartments range in price from $1,865 to $4,923 per month. Penthouses are priced anywhere from $6,500-$12,200 per month.
1. Equity Residential
Equity Residential is one of the nation’s largest owners of multifamily housing. The company owns more than 9,100 apartments across the United States, including 9,100 rental units and 2,200 condos. In addition, it manages another 30,000 units throughout the world.
The company has been growing rapidly since its founding in 2004. As of December 31, 2018, Equity owned 5,948 single family homes and 3,869 multi-family homes throughout the U.S., Canada, Mexico, Puerto Rico and the Caribbean.
In 2017, Equity acquired the entire portfolio of The Ritz-Carlton Residences at Dove Mountain, a luxury resort community in Arizona. This acquisition added 471 residences to Equity’s portfolio, bringing the total number of units to 732.
Since 2012, Equity has invested approximately $2 billion in capital improvements at its properties. These investments include renovations, upgrades, expansions and additions to existing amenities and infrastructure.