Expect L.A. Investment Velocity to Slow in 2019

Chris Cooper is a managing director at Avison Young.

Investment sales activity has been growing for five straight years in Los Angeles, but there is a change brewing in the market. Despite strong fundamentals for developments, all of the easy, quality deals have already traded hands this cycle, and deals are taking longer to trade and more aren’t going through than in past years. As a result, investment deal velocity in Los Angeles could start to slow down this year.

“Because this cycle is now in its eighth year investors are becoming more selective. I think that 2019 will be very similar to 2018, but we could see a slight slow down or reduction in velocity as we go into 2020,” Chris Cooper, a principal and managing director at Avison Young, tells GlobeSt.com. “A lot of the clean deals or the easy deals in Southern California that we saw in 2015 and 2016 when there was a lot of velocity and deals were happening quickly are gone. In 2018 and likely what we will see in 2019, is that transactions are taking longer and we are seeing more transactions fail over due diligence.”