LA Construction Spending Is At Its Highest Since the 1980s…
According to Forbes and Dodge Data, LA construction spending in 2015 reached a historic $11.7 billion dollars. Not only is this the highest LA construction spending has been in three decades, it also puts the Los Angeles metropolitan area fourth in new construction spending – trailing only behind New York ($46.6 billion), Dallas, ($17.8 billion), and Houston ($16.7 billion).
Considering that New York is home to the 1 percenters, and both Dallas and Houston benefit from Texas oil money, fourth place is more than just a participation trophy. It puts LA construction spending well ahead of major cities like Chicago, Washington D.C., Miami, Boston, Atlanta, and Seattle. In fact, San Francisco is the only other California metropolitan area to rank in the Top 20 – coming in at #14 with $6.7 billion spent.
What Can This Flurry of Activity Be Attributed To?
This is the highest construction boom the Los Angeles area has experienced since the 1980s. Following the 2007 recession, LA development stagnated. Very few cranes could be found throughout the metropolitan area and many construction workers were out of work. It wasn’t until 2012, five years later, when LA construction first showed signs of a rebound. Construction activity continued through 2013 and 2014 with more multifamily homes, retail shops, restaurants, office developments, schools, research and healthcare facilities, warehouses, and manufacturing plants being built in the area.
Large-scale high-dollar projects have included the $261 million Grand Avenue Condominiums in downtown LA, a $1.1 billion hotel – the Wilshire Grand Tower – which will be the tallest skyscraper in LA’s skyline, and major renovations and additions at the Los Angeles International Airport (LAX). Other high-rise residences are going up throughout LA and Hollywood.
Downtown LA’s South Park neighborhood has definitely benefitted from this recent commercial real estate boom. Once an area comprised of one parking lot after another and old warehouses, the neighborhood has transformed itself since the Staples Center was built 15 years ago. In May of 2015, CurbedLA mapped 28 new developments in South Park alone.
Who Is Cashing in on Downtown Los Angeles?
Someone has to be paying for all of these construction cranes we’re once again seeing everywhere, right? While it’s the Asian investment groups coming from companies based in Beijing, Singapore, Shanghai, and South Korea getting all of the publicity, there are also developers from New York, Atlanta, and Houston making moves in LA. Back in 2014, Eddie Kim of LA Downtown News grouped together the LA developments funded by big-money outside developers from elsewhere. You can see his data summarized at the DT News website.