Sports Developments are Rising in Inglewood and Raising CRE Rents, Forcing Tenants to Close thier Doors
The Los Angeles Rams will be moving into their brand-new stadium for the 2020 season. The $5 billion stadium entitled LA Stadium and Entertainment District at Hollywood Park is in the City of Inglewood. In addition, the Rams will share the stadium with the LA Chargers as a co-home stadium.
The Rams are currently playing at the Los Angeles Coliseum in Exposition Park and the Chargers have been playing their home games at the Dignity Health Sports Park in Carson. The LA Stadium & Entertainment District at Hollywood park will provide a 298-acre complex including:
• A 70,000-seat stadium with expandable seats up to 100,000 for big events
• A 6,000-seat performance center in the stadium
• 890,000 square feet of retail space
• 300-hotel rooms
• 780,000 square feet of office space
• 2,500 residential apartments and condos
• 25 acres of outdoor parks with bike and walking paths
• State-of-the-art event, conference and meeting space
• a 250,000-square-foot West Coast headquarters for NFL Media and Network
However, NFL football isn’t the only sport that is developing commercial real estate in Inglewood. The National Basketball Association (NBA) is also getting into the commercial real estate development business. The Los Angeles Clippers Basketball team owner is building a new basketball arena in Inglewood at the corner of West Century Blvd. and South Prairie Avenue.
Below is a list of what the Clippers owner plans to develop for $1.2 Billion:
• State-of-the-art competition 18,000 seat venue and practice facility
• Up to 75,000 square feet of office space
• Up to 70,000 square feet for retail, restaurant, hotel and community space
• Sports Medicine Clinic up to 30,000 square feet
These new sports developments are raising lease rates for commercial real estate properties in the adjacent area, according to Jelani Hendrix an Organizer at Uplift Inglewood Coalition. Hendrix said the medium income for Inglewood residents is 40% less than the medium income of Los Angeles City residents.
Some of the retail tenants are experiencing 122 percent rent increases. Ms. B’s M & M Soul Food located at 801 East Manchester received a rent increase from $6,282 to $14,000 per month, according to an article in the Los Angeles Times dated January 31,2019 titled, “Amid Super Bowl excitement in Inglewood, local businesses fear they may soon be crowded out.” Many other shops and restaurants in Inglewood have experienced high commercial real estate rent increases forcing some to relocate or close shop.
High rent rates are passed on to the tenant and in turn passed on to the consumer. In low income areas the residents will not be able to afford to eat at the local establishments. As a result, restaurants may be forced to close their doors.
This is what we are looking at in Inglewood when the new stadium and arena are finished. Businesses that can’t sustain the high retail rents, because the customer base can’t afford their prices.