LA Apartment Developers Push Groundbreakings Out to 2029

Los Angeles apartment developers say their next groundbreakings are three to four years out. At Bisnow’s LA State of the Market event on Oct. 14, executives described aiming new multifamily starts at 2029 and 2030 as costs and interest rates stay high.

Why it matters

For builders and contractors, that pushes the next wave of LA apartment work past 2028. The city’s permit record shows developers are still filing, though. Since Sept. 8, at least 30 permits for new apartment buildings, each declared at $5 million or more, have been submitted to the Los Angeles Department of Building and Safety. Their declared value totals $526.8 million, and none has been issued yet.

A filing in plan check is not a start. The gap between those filings and actual groundbreakings is the number to watch.

The numbers

Bisnow cited two pressures. The 10-year Treasury yield is above 5%, a 24-year high. Cushman & Wakefield’s September Construction Insights report put U.S. construction material prices up 13.3% year over year, nearly five times last year’s rate. Damian Gancman, COO and CFO of Cityview, noted that LA projects take two to three years to build, which puts a 2026 or 2027 start well short of today’s costs easing.

The largest filing in the city’s record is a 168-unit mixed-use building at 16741 W. Ventura Blvd. in Encino, declared at $82.9 million and filed Oct. 6. A 196-unit affordable building at 4200 W. Wilshire Blvd., declared at $33.8 million, has been in plan check since Sept. 24.

What’s next

Several panelists framed the slowdown as a chance to buy rather than build. “We’ll have a generational buying opportunity to buy existing multifamily assets,” said Chris Tourtellotte of LaTerra Development. Joseph Soleiman of AlphaGen Real Estate Partners said he is seeing investors give up, and Mark Weinstein of MJW Investments pointed to LA’s regulatory climate as a hurdle for buyers. Whether this fall’s filings turn into starts before 2029 will show up in issued permits first. Follow the Los Angeles pipeline for the next read.