The announcement of Los Angeles securing the 2028 Summer Olympics is definitely big news for the metropolis in general, but there is little doubt that it will be a major booster for commercial real estate in the city.
Reports at the beginning of the year said the economic impact of the L.A. Olympics could hit $11 billion, and that was if it had won the 2024 bid, which was handed to Paris.
First of all, it is bound to boost hospitality construction, with a projected 3.3 million visitors to city over the Games’ course. Los Angeles is already experiencing some of the strongest RevPAR (revenue per occupied room) growth in the country. On top of this hotel construction in Los Angeles has boomed as of late, with new and coming additions such as Wilshire Grand, Metropolis and Oceanwide Plaza. Most of this new development has taken place downtown, but expect a flood of new construction around venues surrounding the city center, possibly near the Rose Bowl, in Pasadena; the L.A. Forum, in Inglewood; and other locales.
With the significant amount of visitors, there is bound to be a retail boost. Existing stores will see sales explode during the life of the Games, and in anticipation, retailers are bound to open stores in the Los Angeles area to capitalize on those revenues. Expect a slew of restaurants to open their doors, as well as necessity and, likely, pop-up stores. The sustainability of new shopping centers after the Games end is a big question, but if the metro area continues its current retail success — with a 5.6-percent vacancy rate in the second quarter — over the next decade, there could be more retail real estate construction.
One of the biggest wins in landing the Olympics will be improvements to Los Angeles transportation infrastructure. It’s pretty obvious that Los Angeles is a driving town, but if all goes as planned, there will be major improvements to its public-transportation system. There are three rail-line projects that will undoubtedly be sped up for completion by 2028, some of them new, as well as improvements, to both existing subway and light-rail systems. Express busses are forecast to be ramped up. There will also be improvements to the Los Angeles International Airport.
In addition to added exposure to one of the world’s most famous cities, the Olympics should install improvements that will help commercial real estate for its anticipation and steer it in a continued future positive direction.
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