A small, aging industrial building in Inglewood, California, wouldn’t be the sort of property that typically turns heads in the real estate world.
But a nearly 75-year-old, 11,000-square-foot structure at 923 S. Prarie Ave. sold late last year for $8.5 million, about $772 per square foot, according to CoStar data, well above Inglewood’s average of $266 per square foot for industrial property.
The building is among several clustered within a 1-mile radius that have been sold in the past three years, a churn that has generated roughly $616 million in transactions for a diverse set of properties, from an entertainment complex to apartment buildings, small retail centers and industrial properties. That’s far more investment in the city than at any time in the past three decades.
Much of the appeal to real estate investors of the city of roughly 100,000 southwest of downtown Los Angeles lies in SoFi Stadium, the $5 billion home of the NFL’s Los Angeles Rams and site of the team’s Super Bowl victory last month. Sales fliers for nearby properties such as the one on Prairie Avenue boast of their proximity to the 70,000-seat stadium and mixed-use development. But some argue Inglewood’s boom was inevitable, that like neighboring cities such as El Segundo and Hawthorne, where cutting-edge manufacturing and tech companies such as SpaceX have invested, the gritty working-class community was destined to take off.
“It’s surprising it took so long,” said Sandy Sigal, a longtime real estate investor in Inglewood and president and CEO of Los Angeles-based landlord NewMark Merrill.
The city’s proximity to not only Los Angeles International Airport but to major freeways and L.A.’s now-booming tech scene is a major factor feeding a development explosion that is expected to branch out beyond SoFi Stadium for years to come, real estate professionals say.
City of Inglewood
Billionaire Steve Ballmer, former CEO of Microsoft and current owner of the Los Angeles Clippers, has been the biggest property buyer near SoFi Stadium in the past three years. Ballmer dropped $400 million for The Forum entertainment complex, which is north of the site on which he’s building the $1.2 billion Intuit Dome, set to open in 2024 as the Clippers’ new home.
CoStar data shows Ballmer also has been buying other properties around the Intuit Dome, paying a combined $76 million for nearby city-owned land and industrial and hospitality properties. The biggest transaction was an eight-property sale for $66 million in 2021 on a site where Ballmer plans to build parking and a hotel as part of the Intuit Dome complex. Green construction fences now wrap around these properties as building commences.
Ballmer and city representatives did not respond to requests for comment from CoStar News.
At the same time, smaller investors are snapping up sites around SoFi Stadium for land value with the expectation they can profit off the area’s growth. The 11,000-square-foot warehouse at 923 S. Prairie Ave. was sold for land value, said Mitch Stokes, senior executive director of Los Angeles brokerage firm Madison Partners, who was involved in the deal. HMCN Properties of Los Angeles, the buyer, was expected to pick up another 1-acre site nearby as land speculators swoop in near the stadium. A representative of HMCN did not respond to a request to comment from CoStar News.
“It’s similar to what happened when the Staples Center was built downtown,” said Stokes, referencing the parking lots that were sold to developers around what’s now called the Crypto.com Arena in downtown Los Angeles.
Richard Green, director of the University of Southern California Lusk Center for Real Estate, sees the NFL’s arrival in Inglewood as the result, not the cause, of the rush of real estate investors to the city. Developers have been attracted to build in nearby El Segundo and Hawthorne in recent years, as tech firms grew nearby along L.A.’s Pacific Coast in what’s called Silicon Beach. Inglewood has also been a draw.
“The proximity to all of those jobs has fundamentally changed the character of those cities,” Green said. Inglewood “was a place that was on the verge of exploding anyway.”
Inglewood’s growth may have limits. Further development may meet resistance from the 35% of residents who are renters, many of whom are concerned that they won’t be able to afford to live in the city, according to a January 2021 report from the University of Southern California Gould School of Law.
It’s also unclear how much demand for housing in Inglewood can be attributed to this redevelopment, because the city had been seeing increases in home prices years before the Rams and Chargers relocated to Los Angeles, according to the report. Inglewood’s location has always made it potentially desirable, but the stadiums and future transportation investments “brought more visibility to buyers who might once have focused their searches on more upscale Westside communities,” the report’s authors wrote.
For Sigal of NewMark Merrill, the fuse was lit in 2014.
That’s when Crenshaw Imperial Plaza, an office and retail complex totaling 230,000 square feet, came on the market while the Rams were still ensconced in St. Louis and the Chargers played in San Diego. Sigal was interested, and was surprised more investors weren’t bidding on the retail center.
He liked the location, at 2900 W. Imperial Highway, near three major freeways and surrounded by homes. He was also impressed with how much nearby residents valued the shopping center, and he got to know some of the neighbors who liked to make small talk while they shopped.
“I knew it was a good community, and it was underpriced,” Sigal said. “People in our business predominantly come from one socioeconomic class. They’re used to looking at properties they identify with.”
He bought the property for an undisclosed price and fully leased the shopping center before SoFi was built. The property’s retail space is 98% leased and its office space is 93% occupied. Despite the shopping center not attracting much attention in 2014, Sigal said he’s getting calls to sell from investors now.
Still, there is no doubt the development of SoFi Stadium is exerting a dramatic influence on the local real estate market.
Commercial property sales volume in Inglewood surged to $506 million in 2021, the year after the stadium opened, from roughly $153 million in 2012, according to CoStar data. While the total sales for commercial property is far higher in the city of Los Angeles, L.A. saw its total sales more than double in that same time.
Another way to look at Inglewood’s rapid growth: Between 2000 and 2017, there were 448 apartment unit construction starts in the city. That jumped to 3,742 construction starts between 2018 and 2021.
But Green, of USC’s Lusk Center, argues the city’s fundamentals play as large a role as any stadium.
Inglewood’s proximity to major freeways and Silicon Beach tech jobs meant interest in the city’s commercial and residential properties would soar regardless of sports stadium-related investment, he said. The city is sandwiched between Interstates 405, 105 and 110, critical arteries for accessing a wide part of greater Los Angeles. In addition, Inglewood sits on the southern edge of Silicon Beach, an area encompassing Los Angeles’ Westside, Venice and Playa Vista neighborhoods, Santa Monica and parts of Culver City and El Segundo where much of the area’s tech startup community is based.
And then there’s LAX, which borders Inglewood on the west. It was the fourth-busiest airport in the world in 2019 based on passenger traffic and 10th in the world for air cargo tonnage processed, according to Los Angeles World Airports, which operates LAX and two other regional airports.
“Unlike football stadiums, that really draws demand for offices and hotels,” Green said of airports.
Real estate investors hope these factors will keep driving value for property in Inglewood. Up the street from the Prairie Avenue industrial building, Brett Lyon, co-founder of El Segundo-based brokerage firm Lyon Stahl, is marketing 808 E. Kelso St., an 18-unit apartment complex. Lyon has been selling property in Inglewood since 2008, when apartments were trading at around $100,000 a unit. Since then, they have tripled in price, he said.
“There’s always been a lot to like about Inglewood,” Lyon said. “Very recently, we’ve seen potential come to fruition.”
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