Los Angeles has it all. Proximity to the beach. One of the greatest natural ports in the world. A huge industrial base that constantly draws in more workers. The glamour of Hollywood. A vibrant and growing art scene. A booming tech industry. A newly vital downtown. A rich history and a bountiful future. Multiple baseball teams. A great hockey team. Two NBA franchises. What it doesn’t have is an NFL team, leaving it out of America’s most popular sport. When people turn their eyes to the gridiron every Sunday (and Monday, and Thursday), America’s biggest city is left in the cold. That could be changing though, and with it, the real estate of the whole region. For residential rehab of fix-and-flip developers, following the NFL’s moves is the smart way to maximize your investments.
The Los Angeles Football Saga
The NFL has had a long and fitful career in Los Angeles. As far back as 1946, the Cleveland Rams went to the still-new and growing city, predating even the Brooklyn Dodgers in terms of sports teams moving west. This was the early days of the NFL; the Rams eventually moved out of LA proper and into nearby Anaheim. In 1960, the LA Chargers were founded, but moved the next year to San Diego.
The Los Angeles region had two football teams in the 1980s, as the rough and tumble Raiders, then the symbol of Oakland, broke their fans hearts by heading south to LA in 1982. In 1994, the Raiders moved back to Oakland, citing the impossibility of filling the 90,000 seat stadium, which was a violation of NFL rules and would cost them TV revenue. The next year, the Rams decamped for St. Louis, and America’s largest city was without a football team.
Everyone assumed this wouldn’t last, and indeed, every time a team made a rumbling about leaving, the assumed destination was LA. After a while, it became suspected that teams were using the threat of LA to get public money to finance a new stadium, and that the NFL didn’t actually want a team there, so that they could exploit the possibility. It was most likely a combination of a few things, conspiracy and bad luck, that kept the region from having another go at football.
That’s all changed now. No less than three teams want to come to LA—or, rather, come back. The Rams, Chargers, and Raiders are all working out deals to return, which means, in theory, LA could have as many as three teams by next season. There are a lot of twists and turns though. Rumors from the last couple of days say the NFL only wants one team in the area. This hurts the Chargers and Raiders, who had a joint deal to share a stadium. However, it is impossible, even foolish, to draw any conclusions right now. The only thing to know is that it is practically inevitable that Los Angeles will have a football team soon, and as a real estate pro, you should be ready.
How An NFL Team Will Impact The Region and The Real Estate Market
There are two main scenarios in play here, and we’ll talk the impact of each.
Rams Come To LA
If the Rams’ bid is accepted, and they leave St. Louis, the current plan is for them to move into a privately-funded stadium in Inglewood. Current Rams’ owner Stan Kroenke wants to move the team to that neighborhood between the airport and South Los Angeles. This is a smart move, as the area is filled with distressed properties, but also has a freeway-adjacent location that is ready to start prospering again. The glitzy stadium proposal seems out of touch with the area, but it is actually forward-thinking.
A stadium could spur development with the right kind of incentives, and the Los Angeles government will have every reason to build around a new stadium (see for example the renovated Soldier Field and the booming South Loop in Chicago, a harmony of private money and public investment that transformed a neighborhood). A fix-and-flip professional can invest in distressed properties in the area and turn them around for a profit if the right conditions apply.
Chargers and Raiders Come the LA
If this happens, the new joint stadium will be built in Carson, closer to Long Beach, near Compton. There are some who predict that this will have an enormous impact on the city. It is estimated (granted, by interested parties) that the stadium will bring in over $400 million dollars a year in local revenue, and will generate a total of $2.6 billion in economic activity by the time it is even built. Even if these numbers are a bit too optimistic, they are encouraging.
This will have a similar impact on real estate as the Inglewood project. The new construction will bring new jobs, which will improve the price values. The city will also zone and invest in rehab, in new restaurants, multi-family buildings, and other property-value-enhancing projects. Buying distressed property, whether to fix and sell right away or to buy and hold can potentially be a great investment.
Between timeouts, penalties, halftime, challenges, and the play clock, there is a lot of waiting in football. No one has waited longer for it to come back, though, than Los Angeles. But it looks like the waiting is going to pay off. By paying attention to where the new team will go, and by investing wisely and smartly using your hard money loan from Socotra Capital, California’s leading equity-based lender, your investment strategy can be a real home run (er, touchdown).