Los Angeles Retail Splits in Two: Record Investment Sales Coexist With Struggling Neighborhood Businesses

Los Angeles Retail Splits in Two: Record Investment Sales Coexist With Struggling Neighborhood Businesses

Los Angeles’ retail real estate market is telling two very different stories at once. On one side, investor demand for well-positioned shopping centers is running hot, with capital chasing grocery-anchored assets in scarce supply. On the other, many small businesses — particularly in immigrant-heavy commercial corridors — are still grappling with fallout from last year’s federal immigration enforcement surge.

The divergence shows up clearly in transaction data. Investment sales volume in the metro jumped 40% year over year in the second quarter, according to a recent market analysis from real estate services firm Matthews, with much of that capital directed toward grocery-anchored centers and higher-quality assets on the metro’s periphery. In Torrance, a grocery-anchored center changed hands in December for $108 million, a record for the South Bay submarket. JLL separately reported that occupancy at Los Angeles grocery-anchored centers reached 95% in the spring.

NewMark Merrill Companies chairman and CEO Sandy Sigal attributes part of the momentum to capital rotation: with office still out of favor, investors have turned to retail, which exited the pandemic with proven performance and little excess supply.

A Parallel Downturn in Immigrant Commercial Districts

While institutional capital concentrates on a narrow set of assets, UCLA’s report The Cost of Fear documents strain across the county’s Latino business community — which counts 4.76 million residents, half the county’s population, and owns roughly 374,000 firms, about a quarter of all businesses. The June 2025 enforcement surge produced an estimated $3.16 million in losses across nine key enforcement zones, with nearly 60% of surveyed businesses reporting sales fell by half. Countywide, Latino-owned businesses lost an estimated $52 million in revenue within two weeks.

Recovery has been uneven. According to the report, a year on, many of those businesses remain in debt and are barely breaking even. Immigrants make up roughly one in three workers in California, per U.S. Census Bureau data, making the sector’s health a meaningful input for neighborhood retail demand.

Brokerage firms including CBRE and JLL have tracked the strength in essential-retail formats even as discretionary spending in some districts remains fragile — a gap that market watchers say reflects a long-running development shortage favoring prime, high-income trade areas.

What to watch

• Upcoming quarterly retail reports from JLL and other brokerages for occupancy and rent trends in grocery-anchored centers.
• Whether investment sales volume sustains its second-quarter pace through year-end.
• Updates from UCLA and local business groups on revenue recovery among Latino-owned firms.
• Any changes to federal small business lending or immigration policy affecting commercial corridors.

Source: original release