Unsurprisingly, for many of LA’s billionaires, real estate is a key source of income, either because it’s their core business or because a large chunk of their portfolio is invested in commercial or residential real estate.
Real estate experts say Los Angeles remains an attractive real estate market when it comes to investment. Rising property values and a lack of new offers continue to drive the market in Los Angeles County.
According to Stuart Gabriel, director of the Ziman Center at the University of California, Los Angeles, “there are a number of reasons” why someone would want to invest in Los Angeles real estate.
“It’s more like why don’t they invest in real estate in Los Angeles,” Gabriel said. “Los Angeles is an extremely dynamic metropolis; it is one of the largest cities in the world. Here in Los Angeles there are reasonable, if not high, rates of return on real estate. “
He added that innovative companies in the area, as well as sunny weather and access to other areas, make the market desirable. It’s the same with limited inventory.
“People like to invest where there is limited supply,” Gabriel said. “Los Angeles has supply constraints that appeal to investors.”
Ed Roskey Jr., President and Chairman of the Board of Majestic Realty, has seen a big jump in his overall wealth this year due to the increase in the size of his portfolio and the rise in the value of industrial property.
As more companies turn to e-commerce and strive to meet the demand for fast delivery, the need for industrial premises has also increased. Over the past year, Majestic Realty has added millions of square feet to its portfolio.
As a result, Roski’s fortune increased by 13%.
Some Los Angeles real estate veterans with other types of holdings have had more modest growth in their assets.
For example, Rick Caruso’s fortune increased 2% from the previous year to $ 5.9 billion. He is best known for developing high-end retail properties including Grove, Americana at Brand and Palisades Village.
According to Green Street Advisors, retail sales at Caruso hotels are three times the industry average.
People like Vera Guerin, Donald, and Shelley Sterling, who have amassed their wealth through property ownership and other means, have seen a slight increase in their property holdings and more in other areas.
Home sales are skyrocketing
According to Redfin Corp., the residential real estate market in Los Angeles has caught fire, and in March alone, the county’s average selling prices rose 23%.
“I understand why house prices have skyrocketed in terms of pricing. People want to have a place, and one way to get it is to be at home, ”said John Loper, assistant professor at the USC Price School of Public Policy.
He added that the suburbs are also of great interest.
While homelessness could mean a safe investment for the wealthy, Gabriel warned that it could lead some businesses to relocate or grow elsewhere.
Nonetheless, he expects real estate interest in Los Angeles to remain strong.
“There are many factors at play here, and overall interest in Los Angeles real estate will remain strong and should be a permanent and highly desirable location,” he said.
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