California City Scoop: Construction Starts in Los Angeles
Value of New Construction Contracts Expected to Increase by 15% This Year
Southern California’s residential sector showing particular strength in both single family and multifamily.
City Grill
Caleigh Raymer
Vice President and Director of Operations
Lendlease
Los Angeles
The Los Angeles construction market remains resilient, with backlog remaining close to pre-pandemic highs, says Raymer. But raw materials sourcing is triggering escalation concerns. Lumber prices have surged more than 20% this year due to lack of supply. As a result, subcontractors are padding budgets to absorb future risks. “Balancing the material pricing are contractors’ fears of potentially reduced backlogs through 2022,” she says. “Most megaprojects that have shaped L.A. over the past few years will wrap up in 2021, and many future non-entitled jobs are being delayed, driving down fees and construction costs overall.”
For 2021, Raymer expects more market corrections and cost de-escalation, but Lendlease remains positive on L.A’.s market prospects. The firm is planning its first development project in the region at 3401 S. La Cienega Blvd., a 500,000-sq-ft mixed-use project near rapidly growing Culver City, a business hub and submarket within greater Los Angeles. The project is slated to break ground in 2023.
