Despite the skyrocketing price tags and living costs, California’s housing market has always been a favorable option for real estate investors because of the significant amount of appreciation an average property accumulates over many years. Although it has been experiencing an exodus of former residents moving to other states, California itself is still one of the most desirable states to live, vacation, and invest into because housing is always in demand no matter how costly the median prices are.
Out of all the major areas beyond Los Angeles, San Diego and San Francisco where real estate investors can purchase investment and rental properties, one specific area in Southern California is experiencing tremendous growth that has been unheard of before. Tucked away between the bustling streets of Los Angeles and the busy shores of San Diego is a sleeping giant that is ready to take its place amongst major metropolitan areas in the nation: Long Beach, California.
Known to many experienced real estate investors as one of the last affordable and desirable coastal cities in California, the city of Long Beach has experienced a sudden economic development boom in the last decade; and it doesn’t look like this growth will be stopping any time soon based on Long Beach Mayor Robert Garcia’s Economic Development Blueprint. Major real estate developers such as LAB Holding and companies such as SpaceX have set their sights on Long Beach as a land of lucrative opportunity. That’s right! SpaceX is coming to Long Beach!
While Downtown Long Beach has been experiencing its own exponential growth, the City of Long Beach has also been working to develop another under-served yet lucrative area that is well-primed for more economic and structural growth: North Long Beach.
When our team of analysts, agents, and investors at Sage Real Estate caught wind of the developing activities and potential blooming in North Long Beach, we became extremely curious and interested in knowing more so we decided to dig deeper.
Throughout the past 6 months of 2021, we’ve been researching and interviewing important stakeholders to uncover more due diligence for real estate investors. In this blog post, we will be gradually updating and sharing with you all of the information we have gathered around this specific topic.
Our team went directly to the source and interviewed Long Beach City officials such as Vice Mayor Rex Richardson, Deputy Director of Development Services Christopher Koontz, real estate developers, local business owners, and residents of North Long Beach. Here is what we know so far:
Investing in North Long Beach: The Good, the Bad, and the Ugly
The Bad and the Ugly
Over the last few decades, North Long Beach has unfairly received a negative reputation as “one of the most dangerous places in Long Beach”. Local residents traditionally cautioned tourists to avoid the northern part of the city due to high rates of crime, gang violence, and simply for the fact that no part of the area is appealing at all.
Demographic data from the city in 2018 shows that an overwhelming percentage of the population in the area are made up of minorities and working-class citizens while almost a quarter of North Long Beach residents live in poverty. In fact, the residents of this area have been so under-served that the first bank in the area didn’t even open until late 2020.
Looking at the surface and knowing the history behind North Long Beach, any real estate investor would initially shy away from even considering buying a property in the area. However when we dig deeper and know all of the facts, North Long Beach is primed as a hidden gem for major property value appreciation and is ready to become the most lucrative place to invest in California.
The Good (and Most Exciting Details)
According to Juan Huizar, real estate investor and president of Sage Real Estate, the “perfect storm” of opportunity for real estate investors and entrepreneurs is brewing in North Long Beach. Multiple catalysts are indicating that this area is truly a sleeping giant and a hidden gem:
1. Uptown Planning Land Use and Neighborhood Strategy (UPLAN)
In an effort to create new laws and policies to guide future economic development and mold a new vision for North Long Beach, the City teamed up with local communities in the area in a collaboration called the Uptown Planning Land Use and Neighborhood Strategy.
This strategy gave birth to a major rezoning update for vital corridors in North Long Beach, which is the main catalyst that is allowing all of the current and future growth to happen.
In the past, zoning laws and permitting restrictions limited the possibilities and use of certain real estate in specific zones. Moving forward, the rezoning update implemented by the city essentially allows various zones to be “unlocked for a whole mix of uses” and creative opportunities as stated by Christopher Koontz, Deputy Director of Development Services in Long Beach.
Unlocking zones for mixed use allows entrepreneurs and residents to deliver new development projects, business owners to lease out existing storefronts, and decide the best use of a certain parcel without experiencing the drawbacks of traditional regulatory limbo or red tape.
The intention of the City’s efforts is to bring forth the desired goods, services, and housing that the residents of North Long Beach deserve. They believe that these new zoning measures will produce beautiful results through appealing developments by not dictating harsh requirements in a granular way. Instead, the future visual look of North Long Beach is going to be decided by the market: communities, residents, and creative real estate developers.
Read more about the UPLAN Strategy here.
2. North Long Beach Residents Investing Back Into Their Own Properties
Another positive indicator for growth is the increased activity of North Long Beach homeowners and investors pulling permits from the City to renovate their properties. As more and more business developments sprout in the area, Christopher Koontz believes that homeowners are boosting their faith in their neighborhoods and are showing pride by investing back into their properties. Within the past year, the City of Long Beach has seen an increase in homeowners requesting permits for renovating their single-family homes and adding accessory dwelling units into their back yards for extra housing and monthly income.
Traditionally, under-served neighborhoods and communities (such as those in neighboring San Pedro) do not experience major renovations by property owners or an influx of new residents. Although it suffers from having a negative reputation in the past, North Long Beach property owners investing back into their homes is a huge and exciting positive indicator for what is yet to come.
3. Big Real Estate Developers Coming to North Long Beach with Multi-Million Dollar Projects
On the other side of the scale, major real estate developers such as LAB Holding, Frontier Real Estate Group, and Westland Real Estate are bringing multi-million dollar development projects into North Long Beach to produce much-needed goods and services for the communities within.
Frontier Real Estate Group, which also brought the first bank to the area, is adding additional amenities to the northeast corner of Atlantic Avenue and Artesia Boulevard through the Uptown Commons project.
Another project called the Uptown Retail Center by Westland Real Estate Group is being developed on Atlantic Avenue. The Uptown Retail project will reinvigorate the neighborhood providing sit-down and fast-casual restaurants with outdoor seating and diverse architecture that creates an inviting atmosphere.
LAB Holding, the real estate development firm behind Costa Mesa’s LAB Anti-Mall and the Anaheim Packing District, is also adding a creative residential development located right across the newly-built Michelle Obama Library as part of their multi-parcel project in North Long Beach. Top real estate developer Shaheen Sadeghi once said that “There is a very cool culture, I just feel like this neighborhood really needs love. That’s really our mission” as one of his main reasons for choosing North Long Beach.
A former asphalt refinery that sat empty for years is being turned into a brand new 416,000-square-foot Class A warehouse and office facility by Bridge Industrial. The exciting $84 million dollar project is called Bridge Point Long Beach.
4. Neighborhood Mobility Enhancement Plan (NMEP)
On top of all the small scale developments by homeowners and big scale projects by real estate developers, the City of Long Beach is enacting NMEP or Neighborhood Mobility Enhancement Plan to provide a safer, easier, and more pleasant traffic experience for both pedestrians and motorists in North Long Beach. The plan includes improved connectivity between major corridors, adjacent neighborhoods, and infrastructure improvements to provide access to local jobs, goods, and services for communities.
Conclusion of All Catalysts and Indicators of Growth in North Long Beach
Because of the City’s UPLAN Strategy in collaboration with local communities to overhaul zoning in the area, real estate developers (who would never have considered Long Beach) are finding parcels of land (in which they were not able to build projects in the past) to create new and exciting projects. More homeowners and landlords are pulling permits for their own properties to renovate or add housing, which is a great sign of faith in the community. Along with small-scale and big-scale projects, the City’s continued investment into creating the infrastructure to bring the necessary goods and services to the area has primed North Long Beach to experience the “perfect storm” of opportunities for real estate investors, entrepreneurs, and local residents.
Why is North Long Beach a great investment opportunity for anyone?
The current property values in North Long Beach are currently still affordable and may be considered a bargain for many real estate investors and future homeowners. Knowing that hundreds of millions of dollars are being poured into one specific area of an already booming Long Beach, and a renaissance of new growth is occurring as you read this blog, all doubts should be cast aside.
- For real estate investors: The amount of growth in the area positions North Long Beach properties for a great ROI (return on investment) and value appreciation.
- For future home buyers: If every other part of Long Beach is out of your price range, homes in North Long Beach are still affordable.
- For homeowners: The lifestyle shift and changing culture of the area along with new developments will allow a more convenient and better lifestyle.
- For entrepreneurs: North Long Beach has a lot of vacant and affordable sites for business opportunities. However, we predict that vacancies won’t last too long.
Got more questions? Contact us or call Juan Huizar at (562) 307-0838 to learn more about exciting investment opportunities in Long Beach, California!