Long Beach is experiencing one of the most active development cycles in its history. From the $150 million Portico mixed-use project and the $200 million Alexan West End residential tower downtown to Anduril Industries' $1 billion aerospace campus at Douglas Park, the city's development pipeline spans billions of dollars in investment across multiple property types. The Port of Long Beach's $1.8 billion Pier B rail expansion, the 12,000-seat Long Beach Bowl amphitheater near the Queen Mary, and the Downtown Shoreline Vision Plan add further momentum to a construction environment that requires sophisticated financing to execute.
Clear House Lending provides construction financing throughout Long Beach, from ground-up development loans and major renovation financing to build-to-suit industrial projects near the port. This guide covers the construction lending landscape, current rates, project types, and what developers and investors need to know about financing construction in Long Beach in 2026.
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What Does the Long Beach Development Pipeline Look Like in 2026?
Long Beach's development pipeline reflects the city's multi-sector economic growth and its transformation from a historically industrial and port-focused city into a diversified urban center with strong residential, aerospace, entertainment, and mixed-use development activity.
The downtown waterfront is the epicenter of the development boom. The Portico development by JPI is a $150 million, 272-unit mixed-use project at 450 The Promenade North, the first phase of a 900-unit master plan to redevelop the former City Place shopping center. The eight-story podium-style building will combine apartments with ground-level retail. The Alexan West End, located behind the World Trade Center in downtown, secured $200 million in capital funding and represents the largest residential development proposed for Long Beach, with initial occupancies expected in 2026.
At Douglas Park, Anduril Industries is constructing a 1.1 million square foot campus for drone research and development, with six buildings totaling approximately 750,000 square feet of office and 435,000 square feet of R&D space. This $1 billion project is the largest commercial construction initiative in Long Beach and is expected to support roughly 5,500 jobs at full build-out.
The entertainment sector is adding the Long Beach Bowl, a 12,000-seat amphitheater next to the Queen Mary, approved by the Planning Commission in November 2025 and expected to open in 2026. The Downtown Shoreline Vision Plan, the first comprehensive reimagining of the waterfront since the 1970s, establishes a framework for future development across four character areas along the coast.
What Types of Construction Loans Are Available in Long Beach?
Construction financing in Long Beach spans several loan structures, each designed for different project types, scales, and developer profiles.
Ground-Up Construction Loans fund new building development from site preparation through completion. These loans typically cover 60% to 75% of total project costs, including land, hard costs, and soft costs. Funds are disbursed in stages (draws) as construction milestones are reached and verified by the lender's inspector. Ground-up loans are the primary financing tool for projects like the Portico, Alexan West End, and similar multifamily and mixed-use developments.
Renovation and Rehabilitation Loans fund major property improvements that go beyond cosmetic updates. In Long Beach, renovation loans are particularly relevant for office-to-residential conversions (addressing the 31.6% downtown office vacancy), adaptive reuse of older industrial buildings, and substantial multifamily renovation projects in neighborhoods like the Westside and Wrigley.
Build-to-Suit Construction Loans finance development of properties designed for a specific tenant. In Long Beach's industrial market, build-to-suit projects for logistics companies serving the Port of Long Beach and aerospace manufacturers in the Douglas Park cluster are an active segment. The tenant's signed lease provides income certainty that supports favorable lending terms.
Construction-to-Permanent Loans combine the construction phase and permanent financing into a single loan, eliminating the need to refinance upon completion. This structure reduces closing costs and interest rate risk, though it may come with slightly higher rates than separate construction and permanent loans.
SBA Construction Loans are available for owner-occupied commercial construction projects. The SBA 504 program can fund both land acquisition and construction for qualifying businesses, while the SBA 7(a) program provides an alternative for smaller projects.
What Are Current Construction Loan Rates in Long Beach?
Construction loan rates in Long Beach reflect the higher risk profile of development projects compared to stabilized property financing.
As of February 2026, construction loan rates in Long Beach typically range from 7.00% to 9.50%, depending on project type, developer experience, pre-leasing status, and loan-to-cost ratio. The most competitive rates are available for experienced developers with strong track records, projects with significant pre-leasing or pre-sales, and developments in proven submarkets.
Multifamily construction loans tend to cluster at the lower end of the range (7.00% to 8.50%) due to the strong rental demand in Long Beach, with vacancy rates of 3.9% to 5.3% and average rents around $2,650. Industrial build-to-suit projects with signed leases from credit tenants also qualify for competitive rates.
Speculative construction projects without pre-leasing command higher rates (8.50% to 9.50%) and lower leverage, reflecting the additional absorption risk. Mixed-use and office construction in downtown Long Beach may face the highest rates due to the uncertain office demand environment.
Construction loan terms typically run 12 to 24 months, with extensions available for 6 to 12 months if needed. Interest is charged only on the funds drawn, not the total commitment, which reduces the effective cost during the early phases of construction.
Use our commercial mortgage calculator to estimate permanent financing costs once your project is completed.
How Do Construction Loans Work in Long Beach?
Construction lending follows a distinct process compared to permanent financing, with additional steps for project evaluation, draw management, and completion verification.
Pre-Development Phase: Before submitting a construction loan application, developers typically need approved plans and permits from the Long Beach Department of Community Development, a detailed construction budget from a licensed general contractor, a project timeline with milestones, environmental clearances (particularly important for Long Beach's former industrial and port-adjacent sites), and evidence of pre-leasing or pre-sales if applicable.
Loan Application and Underwriting: The lender evaluates the project's feasibility, including the developer's experience and financial strength, construction budget and timeline realism, market demand analysis for the finished product, appraised value of the completed project (the "as-completed" value), and environmental, seismic, and geotechnical reports. In Long Beach, seismic analysis is particularly important given the city's location in an active seismic zone and its history of significant earthquakes, including the 1933 Long Beach earthquake.
Draw Process: Once approved, the loan commitment is established but funds are not disbursed all at once. Instead, the developer requests draws as construction progresses. The lender's inspector verifies that work has been completed per the approved plans before releasing each draw. Typical draw schedules include foundation completion, framing, mechanical/electrical/plumbing, interior finish, and final completion.
Interest Reserve: Most construction loans include an interest reserve, a portion of the loan set aside to cover interest payments during the construction period. This ensures the developer does not need to make out-of-pocket interest payments while the property is under construction and producing no income.
Completion and Takeout: Upon construction completion, the developer either refinances into a permanent loan (a "takeout" loan) or, in the case of a construction-to-permanent loan, the loan automatically converts to permanent financing terms. The permanent financing rates are significantly lower, typically 5.18% to 7.25% for conventional loans or 5.30% for agency multifamily.
What Types of Construction Projects Are Most Active in Long Beach?
The Long Beach construction market spans multiple property types, each with distinct financing requirements and market dynamics.
Multifamily and Mixed-Use Residential development dominates Long Beach's construction pipeline. The Portico ($150 million, 272 units) and Alexan West End ($200 million) are the flagship projects, but smaller multifamily developments are active throughout the city. Long Beach's tight vacancy (3.9% to 5.3%), relative affordability compared to Westside LA, and growing employment from the port and aerospace sectors support strong rental demand for new apartment product. Construction lenders view Long Beach multifamily development favorably due to these fundamentals.
Industrial and Aerospace Facilities represent the second largest construction category. Anduril's 1.1 million square foot Douglas Park campus is the signature project, but other aerospace and logistics companies require build-to-suit facilities near the port and airport. The Port of Long Beach's $1.8 billion Pier B rail expansion drives demand for modern warehouse and distribution facilities along the I-710 corridor. Industrial construction loans with signed tenant leases receive the most favorable terms.
Entertainment and Hospitality construction includes the Long Beach Bowl amphitheater (12,000 seats, expected 2026 opening) and various hotel and hospitality projects driven by the convention center, waterfront attractions, and the Queen Mary entertainment complex.
Office-to-Residential Conversions represent a growing category that blends renovation and construction financing. Converting downtown Long Beach's surplus office inventory (31.6% vacancy) into residential units requires substantial construction investment, including structural modifications, mechanical system upgrades, unit buildouts, and common area improvements.
What Should Developers Know About Building in Long Beach?
Long Beach's development environment involves several local factors that affect construction costs, timelines, and financing.
Permitting and entitlements in Long Beach are managed by the Department of Community Development. The city has been generally supportive of new development, particularly mixed-use and residential projects that align with the Downtown Plan and the Shoreline Vision Plan. However, the California Environmental Quality Act (CEQA) review process can add 6 to 18 months to project timelines for larger developments, and community input processes may extend entitlement timelines further.
Construction costs in Southern California have escalated significantly in recent years. As of early 2026, hard costs for multifamily construction in Long Beach range from approximately $300 to $450 per square foot depending on building type (wood-frame podium vs. steel/concrete), finish level, and seismic requirements. Industrial construction costs are lower, typically $100 to $200 per square foot for tilt-up warehouse construction.
Seismic requirements add cost to Long Beach construction projects. The city sits in a highly active seismic zone, and the 1933 Long Beach earthquake led to some of the first modern building codes in California. Current seismic design requirements, including base isolation systems for larger structures and special moment frame construction, add approximately 5% to 15% to structural costs compared to non-seismic regions.
Environmental considerations are particularly important in Long Beach. The city's oil industry heritage means some development sites carry legacy contamination that may require remediation before construction can begin. Port-adjacent sites may face additional environmental review. Phase I and Phase II environmental site assessments should be completed early in the development process to avoid delays and budget surprises.
Labor and material availability have been variable in the Los Angeles metro construction market. Developers should plan for potential timeline extensions and include adequate contingency reserves (typically 10% to 15% of hard costs) in their construction budgets.
How Does Long Beach's Construction Market Compare to Other Southern California Markets?
Long Beach's construction costs and development dynamics compare favorably to many other Southern California markets.
Multifamily construction costs in Long Beach are generally 10% to 20% below comparable projects in West Los Angeles, Santa Monica, and Beverly Hills due to lower land costs, less restrictive height requirements in some areas, and a more development-friendly political environment. However, Long Beach costs are higher than Inland Empire locations, where land is significantly cheaper and development density requirements are lower.
The city's development pipeline is substantial relative to its size. The combination of the downtown waterfront transformation, aerospace campus construction, port infrastructure investment, and residential projects creates a level of construction activity that approaches much larger cities on a per-capita basis.
For construction lenders, Long Beach's diversified economy provides confidence that completed projects will find tenants or buyers. The port's record cargo volumes, the aerospace sector's growth trajectory, and strong multifamily demand fundamentals all support the absorption assumptions that underpin construction loan underwriting.
Frequently Asked Questions
What is the minimum down payment for a construction loan in Long Beach?
Construction loans typically require 25% to 40% equity, meaning the loan covers 60% to 75% of total project costs (land plus construction). The exact equity requirement depends on the developer's experience, project type, pre-leasing status, and market conditions. Experienced developers with strong track records and pre-leased projects can sometimes achieve higher leverage. SBA construction loans for owner-occupied projects may allow lower equity requirements of 10% to 20%.
How long does it take to get a construction loan approved in Long Beach?
Construction loan approval typically takes 45 to 90 days from application, assuming the developer provides complete documentation including approved plans, contractor bids, environmental clearances, and financial statements. The appraisal process, which requires an "as-completed" value estimate, can take 3 to 4 weeks alone. Developers can accelerate the process by having all documentation prepared before applying and by engaging experienced construction lenders familiar with the Long Beach market.
Can I get a construction loan for an office-to-residential conversion in Long Beach?
Yes, construction loans are available for office-to-residential conversion projects in Long Beach, though lenders will scrutinize the project carefully given the city's office market challenges. Key factors include the purchase price relative to conversion costs, the projected rental income from the completed residential units, the developer's experience with similar conversion projects, and the project timeline. Some lenders may prefer to structure conversions as renovation bridge loans rather than traditional construction loans, depending on the scope of work.
What environmental considerations affect construction lending in Long Beach?
Long Beach's industrial and oil production history means environmental due diligence is critical for construction projects. Phase I environmental site assessments are required for virtually all construction loans. If potential contamination is identified, Phase II testing and possibly remediation may be needed before construction can begin. Port-adjacent sites may require additional environmental review under CEQA. These requirements can add costs and timeline to the development process, and construction lenders will factor environmental risk into their underwriting.
How do construction loan draws work?
Construction loan draws are disbursements of loan funds as construction progresses. Typically, the developer requests a draw monthly or at specified milestones. The lender sends an inspector to verify that the work claimed has been completed per the approved plans and budget. Once verified, the lender releases the draw, usually retaining 5% to 10% as a holdback until substantial completion. Interest accrues only on funds drawn, not the total loan commitment, which helps manage costs during early construction phases.
What happens if my Long Beach construction project goes over budget?
Cost overruns are one of the primary risks in construction lending. Most lenders require a contingency reserve of 10% to 15% of hard costs built into the project budget to absorb unexpected expenses. If the contingency is exhausted, the developer typically needs to contribute additional equity to cover the overrun. In some cases, the lender may agree to a loan modification to increase the commitment, but this requires additional underwriting and approval. Building realistic budgets with adequate contingency from the start is the best protection against overrun risk.
Contact Clear House Lending today to discuss construction financing for your Long Beach development project. Our team works with developers across the spectrum, from first-time ground-up projects to experienced operators executing large-scale mixed-use and industrial developments.