As part of our broader strategy to invest in rental housing in supply-constrained cities, we’ve acquired a mixed-use property in the Jefferson Park area of Los Angeles for roughly $1.5 million. Thanks to a variety of factors, including tech companies opening major offices, an expansion of the LA Metro system, and prospective homebuyers being priced out of more established neighborhoods, we believe that this area is poised to undergo outsized growth over the next seven to ten years.

Business plan

The property is currently comprised of one retail, one office, and four residential units across three buildings, totaling 4,625 square feet of rentable space. At the time of our acquisition, the retail, office, and three of the four residential units were occupied. The plan is to renovate and rent the residential units while we explore a major redevelopment of the remaining space for a retail tenant.

We paid roughly $1.5 million for the property, and anticipate spending an additional $630,000 on renovations over the next two years.

Our goal is to earn consistent cash flow from rent payments over the next ten years while capturing what we believe will be continued strong price appreciation in LA’s emerging neighborhoods.

Why we invested

  • Major tech boom in South LA: The property is located four miles east of Culver City, where Amazon Studios, Apple, HBO, and WeWork are in the process of opening major offices. We expect that a substantial number of the thousands of tech employees who will work in these offices will also want to live, dine, and shop nearby, driving a major increase in overall property values.
  • Steps from transit: The property is within walking distance of the Expo / Crenshaw Station on the LA Metro, offering accessibility to downtown and Santa Monica.
  • City-wide housing shortage: LA housing prices have grown much faster than incomes in recent years, resulting in a major affordability crisis within the city. With large sections of the city simply out of reach for many renters and homebuyers, we believe that smart investments in up-and-coming areas will deliver attractive long-term returns. See our LA market analysis.

As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.