Overview

Submarket vacancy in Glendale, 2.8%, is at its lowest levels in decades. Average rents in Glendale rates trended downward through much of 2020 but recovered to pre-pandemic levels in 21Q2. Asking rates are presently growing at 5.0% on a year-over-year basis.

Glendale was one of L.A.'s hotspots for new multifamily construction last decade, with more than 3,600 units delivered during this time. However, the current construction pipeline is relatively modest.

Many of the largest recent apartment transactions have involved public agencies seeking to convert large communities into middle-income housing through the assistance of tax-exempt bond financing. The average price for Glendale apartments is $480,000/unit, with cap rates averaging 3.8%.

Vacancy

Glendale's vacancy rate has been declining since peaking in 20Q2 and is presently 2.8%, below the Greater L.A. apartment average of 3.5%. Even the vacancy rate for higher quality 4 & 5 Star properties is very tight, at 4.4%, which stands in contrast to the 6.8% seen for this segment for all of L.A. County.

Glendale's status as a centrally located employment hub is a key source of rental demand. Aside from the concentration of employers in Glendale itself, the city ABSORPTION, NET DELIVERIES & VACANCY provides relatively easy access to several other major job nodes in the region.

Considering current construction levels are modest, supply will do little to upend market fundamentals in the submarket. Even in the face of modest anticipated leasing activity in the near term, submarket vacancy will likely remain historically low for at least the near to midterm.

Rent

Average apartment asking rents in Glendale, $2,230/month, are in line with the L.A. County market average but are slightly lower than in Tri-Cities Burbank and Pasadena. Gains over the last four quarters, 5.0%, compare to 4.2% for the Greater Los Angeles apartment market. Rents dipped slightly in 2020, but recovered to DAILY ASKING RENT PER SF pre-pandemic levels in 21Q2.

Looking ahead, rent growth in Glendale is expected to remain relatively strong through at least the rest of the year given current market tightness combined with a favorable renter demand outlook.

Construction

Glendale was one of the more active submarkets in L.A. for multifamily developments during the last decade. However, units under construction have been minimal since late 2019. The most recent large delivery, Arista, a 98-unit community by developer Adept Development, completed in 22Q3.

There are presently 260 units under construction in the submarket. The largest project underway, 411 N Brand Blvd., commenced construction in 22Q2. The 228-unit project by developer Bay Area-based Amidi Group is slated to deliver in early 2024.

Multifamily developers often find it easier to build in Glendale than in many other parts of the L.A. metro, thanks to the responsiveness of the community DELIVERIES & DEMOLITIONS development office and a streamlined entitlement process. In 2019, the city passed a Downtown Specific Plan that provides greater clarity on development potential in the area.

The plan mandates two- and three-bedroom units must compose at least 20% of the unit mix of any new residential project, as well as other requirements governing design, sustainability, and public space standards. Currently, nearly 75% of apartment units in Glendale are studios or one-bedrooms, a higher concentration of small units than in most other L.A. submarkets. Newer luxury communities are concentrated along Brand Boulevard and North Central Avenue north of the Americana at Brand shopping center.

Sales

Glendale has long been a sought-after submarket for institutional and private investors alike, with some of the area's newest communities having traded in recent years. Average pricing per unit in Glendale, $480,000, is above the metro average of $420,000. Average market cap rates, 3.8%, are slightly below the Greater L.A. apartment market average.

The first half of 2021 witnessed three properties trade for north of $100 million. Each of these communities was acquired to convert from market-rate to middle-income housing with the assistance of tax-exempt bond financing, which is interesting considering they are all higher-quality properties built within the last decade.

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