Los Angeles is the largest retail real estate market on the West Coast and one of the most dynamic in the country. From the luxury boutiques lining Rodeo Drive to the ethnic retail corridors of Koreatown and East LA, the city spans over 469 square miles of commercial diversity that no other metro can match. In 2025, LA County recorded roughly $3.1 billion in retail investment sales over a trailing 12-month period, and prime urban retail corridors have staged a vibrant post-pandemic comeback. For investors and business owners looking to finance strip malls, shopping centers, single-tenant NNN properties, or street-level storefronts across the LA basin, understanding your loan options is the key to capturing this market's upside.
Clear House Lending provides retail property financing across Greater Los Angeles, including SBA loans, bridge financing, conventional commercial mortgages, and DSCR loans. Whether you are purchasing a neighborhood strip center in the San Fernando Valley, refinancing a single-tenant NNN drugstore in Torrance, or acquiring street retail on Abbot Kinney Boulevard, this guide covers the loan programs, market data, and strategic insights you need. For a broader view of LA commercial lending, visit our Los Angeles commercial loans hub.
Need Financing for This Project?
Stop searching bank by bank. Get matched with 6,000+ vetted lenders competing for your deal.
What Does the Los Angeles Retail Real Estate Market Look Like Right Now?
The Los Angeles retail market in 2025 presents a tale of two segments. High-street retail corridors such as Rodeo Drive, Melrose Avenue, and Abbot Kinney Boulevard continue to attract luxury and lifestyle tenants, sustaining steady rent appreciation and near-full occupancy. Meanwhile, broader suburban and neighborhood retail across the metro has softened, with the market recording the largest space losses among retail markets nationally during Q3 2025.
Asking rents across LA County averaged approximately $32 to $38 per square foot for neighborhood and community retail, while prime high-street corridors commanded significantly higher rates. The overall retail vacancy rate ticked up modestly, marking the first uptick in nine quarters, though it remains well below the vacancy rates seen in office and industrial sectors. Net absorption fell 77% year-over-year across the broader retail market, though rents still managed to grow by 1.9% nationally, a pattern that held in LA's strongest submarkets.
Investment activity tells a more optimistic story. In the first 11 months of 2025, the Los Angeles retail market saw nearly $1.5 billion in investment sales, with 52 assets changing hands at an average price of $228 per square foot. Marquee transactions included UNIMAT Commercial's $69 million acquisition of The Hollywood Collection along the Walk of Fame and CIM Group's $44 million purchase of District La Brea. Larger regional shopping centers also traded hands, including Lakewood Center at $332.1 million and River Oaks Shopping Center in Santa Clarita, acquired by Nuveen as part of a five-center Southern California portfolio totaling $306 million.
What Types of Retail Properties Can You Finance in Los Angeles?
Los Angeles offers one of the broadest ranges of retail property formats in the country, reflecting the city's sprawling geography, car-oriented culture, and diverse demographics. Each retail format carries a distinct financing profile that lenders evaluate differently.
Strip Malls and Neighborhood Centers are the backbone of LA retail. These properties typically feature 5,000 to 50,000 square feet of leasable space anchored by a mix of local tenants: dry cleaners, nail salons, taco shops, convenience stores, and small medical offices. They are found in every submarket from Van Nuys to Downey to Inglewood. Strip malls are strong candidates for DSCR loan programs because lenders can underwrite based on the stabilized rental income without requiring personal income verification from the borrower.
Single-Tenant NNN Properties with credit tenants such as Walgreens, McDonald's, Starbucks, or Chase Bank offer the most straightforward financing profile in the LA market. These net-leased assets produce predictable income with minimal landlord obligations, making them attractive to lenders. A single-tenant NNN retail property with a long-term lease to a national credit tenant in a strong LA location can secure conventional financing at the most competitive rates available.
Shopping Centers and Multi-Tenant Retail range from community centers of 50,000 to 200,000 square feet anchored by grocery stores or big-box retailers to larger regional centers. Properties like Lakewood Center and Long Beach Towne Center represent the upper end of this spectrum. These assets require financing in the $5 million to $100 million range and are typically financed through CMBS loans, life company programs, or bank portfolio lending.
Street Retail and High-Street Storefronts along corridors like Rodeo Drive, Melrose Avenue, Abbot Kinney Boulevard, and Colorado Boulevard in Old Pasadena command premium rents and attract both local and international tenants. Financing for these properties typically involves conventional commercial mortgages or portfolio loans from relationship lenders who understand the premium nature of these locations.
Ethnic and Specialty Retail Corridors represent a unique LA asset class. Koreatown's Western Avenue, Little Tokyo, Chinatown, the Vietnamese corridor along Bolsa Avenue in nearby Westminster, and the Latino retail districts of East LA and Boyle Heights all feature dense retail environments with strong foot traffic and loyal customer bases. These corridors offer compelling investment fundamentals at price points well below the Westside market.
What Are the Current Retail Loan Rates in Los Angeles?
As of early 2026, commercial mortgage rates for retail properties in Los Angeles have stabilized after the rate hikes that dominated 2023 and 2024. The prime rate settled at 6.75% as of December 2025, and the 10-year Treasury yield hovered around 4.26% in late January 2026. California commercial mortgage rates start as low as 5.11%, though retail properties typically carry a modest premium over multifamily and industrial assets due to perceived higher risk.
Conventional commercial mortgages for stabilized retail properties with strong occupancy start at approximately 5.50% to 7.00% for fixed-rate terms of 5, 7, or 10 years. Properties with credit tenants on long-term NNN leases in prime LA locations can secure rates at the lower end of this range.
SBA 504 loans for owner-occupied retail properties offer fixed rates starting around 5.50% through the CDC debenture portion, with total blended rates typically falling between 5.75% and 6.75%. SBA 7(a) loans carry rates in the 6.50% to 8.00% range but offer flexibility for properties that do not fit neatly into conventional programs.
Bridge loans for retail acquisitions, lease-up situations, or repositioning projects range from 7.50% to 10.00%. These short-term loans are essential in competitive LA submarkets where speed of execution can determine whether a buyer wins or loses a deal. Read our commercial bridge loan guide for a detailed overview of the process.
DSCR loans for retail investment properties currently range from 6.25% to 8.50%, with rates depending on the property's debt service coverage ratio, borrower credit score, and loan-to-value ratio. Use our DSCR calculator to estimate whether your retail property meets minimum coverage requirements.
Hard money loans for retail properties requiring fast closings or that do not qualify for conventional financing range from 9.00% to 12.50%.
To estimate your monthly payments and evaluate different financing scenarios, try our commercial mortgage calculator.
How Do LA's Retail Corridors Compare for Investment?
Los Angeles has dozens of distinct retail corridors, each with its own character, tenant mix, rent profile, and investment thesis. Understanding these differences is critical for both financing decisions and long-term returns.
Rodeo Drive and the Beverly Hills Triangle represent the pinnacle of luxury retail in the Western United States. Average asking rents in the Triangle can exceed $500 per square foot for prime ground-floor space, and the tenant roster reads like a who's who of global luxury brands. Financing for Rodeo Drive properties requires substantial equity and typically involves relationship lending with major banks or private capital. JLL has identified the Beverly Hills Triangle as one of the top luxury retail corridors in North America, where barriers to entry continue to rise.
Melrose Avenue and Fairfax have evolved from vintage shops and streetwear culture into a corridor that mixes global fashion brands with independent boutiques, restaurants, and experiential concepts. Rents along prime Melrose blocks range from $80 to $200 per square foot, and the corridor benefits from strong foot traffic driven by both tourists and LA's fashion-conscious residents. This area attracts both local and institutional investors looking for growth-oriented retail assets.
Abbot Kinney Boulevard (Venice) is one of the most celebrated retail streets in Southern California. The corridor features a curated mix of independent shops, high-end restaurants, and lifestyle brands spread across converted bungalows and small commercial buildings. Rents typically range from $80 to $150 per square foot. Properties here are tightly held, and acquisitions often require bridge financing to close quickly when rare opportunities arise.
Old Pasadena (Colorado Boulevard) offers a walkable, mixed-use retail environment that draws shoppers from across the San Gabriel Valley. The corridor combines national retailers with independent restaurants and entertainment venues. Rents range from $50 to $100 per square foot, and the area benefits from strong demographics and proximity to the Gold Line Metro.
Third Street Promenade and Montana Avenue (Santa Monica) serve different segments of the Santa Monica market. Third Street Promenade is an open-air pedestrian mall with national retailers and restaurants, while Montana Avenue features upscale boutiques and neighborhood retail. Both corridors command rents in the $75 to $200 per square foot range.
Koreatown (Western Avenue and Olympic Boulevard) is one of the densest retail environments in Los Angeles, with a mix of Korean restaurants, karaoke bars, beauty supply stores, and medical offices. The area's strong population density and transit access make it an attractive market for retail investors looking for steady cash flow at moderate price points.
What Loan Programs Work Best for LA Retail Properties?
The right financing structure for a retail property in Los Angeles depends on your investment strategy, occupancy status, property condition, and whether you plan to occupy the space yourself.
For Owner-Occupied Retail: If you are purchasing a retail property where your own business will occupy at least 51% of the space, SBA loans deliver the best terms available. The SBA 504 program provides long-term fixed-rate financing with just 10% down, while the SBA 7(a) program offers flexibility for a broader range of property types. This is especially valuable in LA, where even a modest storefront can cost $1 million to $3 million. Read our comprehensive SBA loan guide for commercial real estate for detailed eligibility requirements.
For Stabilized Investment Properties: Conventional commercial mortgages or DSCR loans are the standard choices. If your retail property has strong occupancy and established tenants generating consistent rental income, a conventional loan offers the lowest rates. If you prefer to qualify based on property income rather than personal income, a DSCR loan streamlines the qualification process.
For Value-Add and Repositioning: When acquiring a retail property that needs lease-up, renovation, or tenant improvements, bridge financing provides the short-term capital needed to stabilize the asset before refinancing into permanent debt. This is particularly common in LA, where older strip malls in gentrifying neighborhoods offer significant upside when updated and re-tenanted.
For Ground-Up Retail Development: Construction loans fund new retail development projects, from standalone buildings to the retail components of larger mixed-use developments. LA's permitting process and entitlement timeline add complexity, making experienced sponsorship and a strong development track record essential for securing construction financing.
How Have the 2025 Wildfires Impacted LA Retail Lending?
The January 2025 wildfires that devastated the Palisades and Altadena communities sent shockwaves through the Los Angeles commercial real estate market, and the retail sector was not spared. Approximately 200 commercial buildings, predominantly retail properties and food-and-beverage establishments, were destroyed. Within the burn perimeter, an estimated 374 commercial structures representing 4.5 million square feet of space were directly affected.
For retail property financing, the wildfires created several ripple effects that borrowers and investors should understand.
Insurance Requirements Have Intensified: Lenders across the LA market have tightened fire insurance requirements for retail properties, particularly those in or near wildfire-prone zones. Properties in hillside areas, along urban-wildland interfaces, or in neighborhoods adjacent to the burn areas face higher insurance premiums and stricter coverage mandates from lenders. Some borrowers have reported insurance costs doubling or tripling for properties in elevated-risk zones.
Demand Has Shifted Toward Flatland Retail: McKinsey and ULI research both noted that flatter, more walkable neighborhoods with established retail corridors are seeing increased interest from both tenants and investors. Retail properties in areas like Mid-Wilshire, Koreatown, Silver Lake, and the San Fernando Valley floor have benefited as demand shifts away from hillside-adjacent locations.
Rebuild Financing Is Available: For retail property owners in the affected areas, rebuild loans and SBA disaster loans offer pathways to reconstruction. The average structure in the burn zone was built in the mid-1950s, presenting an opportunity to rebuild with modern, more resilient, and higher-value retail spaces. Investors have aggressively targeted land in fire-affected neighborhoods, purchasing roughly 40% of vacant lots that sold in Q3 2025.
Lending Caution in Affected Zones: Lenders are exercising additional caution when underwriting retail properties near the burn areas, often requiring updated environmental assessments, soil reports, and enhanced insurance documentation. This has extended closing timelines by 2 to 4 weeks for properties in the Palisades, Altadena, and surrounding communities.
What Are the Requirements for a Retail Property Loan in Los Angeles?
Retail property loans in Los Angeles follow national underwriting standards with several California-specific considerations that borrowers should plan for.
Down Payment and Equity: Conventional retail property loans require 25% to 35% down. In LA, where a neighborhood strip center might cost $2 million to $5 million and a prime corridor property can exceed $10 million, this translates to significant upfront capital. SBA loans reduce the down payment to as low as 10% for owner-occupants, making them the most accessible entry point for business owners.
Debt Service Coverage Ratio: Lenders require a minimum DSCR of 1.20x to 1.30x for retail properties. For properties with short-term leases, seasonal tenants, or significant tenant concentration, lenders may require a DSCR of 1.35x or higher. Use our DSCR calculator to evaluate your property.
Tenant Quality and Lease Terms: The creditworthiness and lease duration of your tenants have a direct impact on both loan approval and interest rate. A property with a 10-year NNN lease to a national credit tenant will receive significantly better financing terms than a multi-tenant property with month-to-month local tenants.
Seismic and Environmental Considerations: Many older retail buildings in LA were constructed before modern seismic codes. Lenders routinely require seismic risk assessments (Probable Maximum Loss reports) for retail properties, and buildings with PML scores above 20% may require seismic retrofit as a loan condition. Environmental Phase I reports are standard for all commercial transactions.
California-Specific Regulations: Borrowers should be aware of Proposition 13's impact on property tax reassessment at purchase, California's Title 24 energy compliance requirements for renovations, and local rent control ordinances that may affect ground-floor commercial tenants in certain jurisdictions.
Contact Clear House Lending for a no-obligation consultation on your Los Angeles retail property financing.
How Does the San Fernando Valley Compare to the Westside for Retail Investment?
The San Fernando Valley and the Westside represent two fundamentally different retail investment environments within the City of Los Angeles, and the financing considerations differ accordingly.
The San Fernando Valley is the largest suburban retail market within LA city limits. Ventura Boulevard stretches 18 miles through Sherman Oaks, Encino, Tarzana, and Woodland Hills, forming one of the longest commercial strips in the country. Valley retail rents average $30 to $55 per square foot for neighborhood centers and $55 to $90 per square foot for prime Ventura Boulevard locations. The Valley offers higher cap rates (typically 5.5% to 7.5%), lower entry prices, and strong local demand from its 1.8 million residents. Lenders view stabilized Valley retail favorably, and these properties are well-suited for DSCR loans and conventional commercial mortgages.
The Westside (Beverly Hills, Santa Monica, Brentwood, West Hollywood, Venice) commands the highest retail rents in the metro outside of Rodeo Drive. Average rents range from $80 to $200+ per square foot, with cap rates compressed to 4.0% to 5.5%. The Westside attracts institutional capital and high-net-worth investors, and financing often involves larger loan amounts with more stringent underwriting. Properties here benefit from affluent demographics, strong tourism traffic, and limited new supply.
For financing purposes, the key difference is this: Valley retail properties typically offer better cash-on-cash returns and meet DSCR requirements more easily due to lower acquisition costs relative to income. Westside properties offer stronger appreciation potential and tenant demand but require more equity and generate thinner initial yields. Both markets are highly financeable through Clear House Lending's loan programs.
What Should You Know About Shopping Center Financing in LA?
Shopping center transactions have been a highlight of the LA retail market in 2025. Large, traditional shopping hubs have traded hands at significant prices, and the asset class has attracted renewed investor attention. A flurry of nine-figure transactions, including the $332 million sale of Lakewood Center and Nuveen's $306 million five-center portfolio acquisition, demonstrates that institutional capital is flowing back into well-positioned retail centers.
Financing a shopping center in Los Angeles requires navigating several considerations unique to larger retail assets.
Anchor Tenant Risk: Shopping centers anchored by major grocery chains, discount retailers, or home improvement stores benefit from the traffic these anchors generate. However, the loss of an anchor tenant can devastate a center's performance. Lenders closely evaluate anchor lease terms, co-tenancy clauses, and the financial health of anchor tenants when underwriting shopping center loans.
Loan Size and Lender Selection: Shopping centers in the $10 million to $100 million range are typically financed through CMBS loans (offering non-recourse terms and competitive rates), life insurance company loans (offering the lowest rates for premium assets), or bank portfolio programs (offering relationship-based terms and flexibility). For centers below $10 million, conventional commercial mortgages and DSCR loans are appropriate.
Renovation and Repositioning Capital: Many LA shopping centers built in the 1960s through 1990s require modernization to compete with newer retail formats and mixed-use developments. Lenders evaluate renovation plans, projected rent increases, and the borrower's track record with retail repositioning projects.
Ground Lease Considerations: Some LA shopping centers sit on ground-leased land, which affects both the property's value and the available financing options. Lenders require a minimum remaining ground lease term (typically 30 to 50 years beyond the loan maturity) and may impose additional conditions for properties on leased land.
What Tax and Regulatory Factors Affect LA Retail Property Financing?
California and Los Angeles have a distinct tax and regulatory framework that directly impacts retail property investment returns and financing structures.
Proposition 13 and Property Taxes: Under Proposition 13, commercial property taxes in California are based on the purchase price (assessed value) rather than current market value, with annual increases capped at 2%. This means that a retail property purchased for $3 million will have a significantly lower tax bill than the same property purchased for $6 million today. When modeling cash flows for loan qualification, it is critical to use the post-acquisition assessed value rather than the seller's current tax bill.
Transfer Taxes: LA County charges a documentary transfer tax of $1.10 per $1,000 of value. The City of Los Angeles adds $4.50 per $1,000 through Measure ULA (effective April 2023), which applies to properties selling for $5 million or more. For a $10 million retail property, this translates to total transfer taxes of approximately $56,000, a meaningful closing cost that should be included in your acquisition budget.
Seismic Retrofit Ordinances: The City of Los Angeles has mandatory seismic retrofit requirements for certain building types, including soft-story wood-frame buildings and non-ductile concrete buildings. Retail properties falling under these ordinances may require retrofit work costing $50,000 to $500,000 or more, and lenders factor these costs into their underwriting.
Title 24 Energy Standards: California's building energy efficiency standards apply to any retail property undergoing significant renovation. Compliance with Title 24 can add 5% to 15% to renovation costs but may also qualify the property for utility rebates and enhanced tenant appeal.
ADA Compliance: California has some of the strictest ADA enforcement in the country, with a robust private right of action that makes retail properties particularly vulnerable to accessibility lawsuits. Lenders increasingly review ADA compliance status as part of their due diligence, and properties with unresolved accessibility issues may face loan conditions requiring remediation.
Ready to discuss your LA retail property loan? Contact Clear House Lending today.
Frequently Asked Questions
What is the minimum down payment for a retail property loan in Los Angeles?
The minimum down payment depends on the loan program. SBA 504 and SBA 7(a) loans allow as little as 10% down for owner-occupied retail properties. Conventional commercial mortgages for investment retail properties require 25% to 35% down. DSCR loans typically require 25% to 30% down. In LA, where even a modest strip center can cost $2 million, a 10% SBA down payment still means $200,000 in cash equity.
Can I get an SBA loan for a retail storefront in Los Angeles?
Yes. SBA loans are among the most popular financing tools for retail storefronts in Los Angeles, particularly for business owners who will occupy the space. Both the SBA 7(a) and SBA 504 programs are available for retail property purchases, and they offer lower down payments and longer terms than conventional loans. Your business must occupy at least 51% of the total property space. Learn more in our SBA loan guide.
How do the 2025 wildfires affect my ability to get a retail property loan in LA?
The wildfires primarily impact lending in and near the burn zones (Palisades, Altadena, and surrounding areas). Lenders require enhanced fire insurance documentation and may impose higher coverage requirements for properties in wildfire-risk zones. For properties outside the affected areas, lending has continued normally, though insurance costs across the broader LA market have increased. Retail properties in flatland urban neighborhoods have actually seen increased investor demand as buyers reassess location risk.
What DSCR do lenders require for LA retail properties?
Most lenders require a minimum debt service coverage ratio of 1.20x to 1.30x for retail properties. This means the property's annual net operating income must be at least 20% to 30% higher than the annual loan payments. Properties with short-term leases, high tenant turnover, or single-tenant concentration may face DSCR requirements of 1.35x or higher. Use our DSCR calculator to estimate your property's coverage ratio.
How long does it take to close a retail property loan in Los Angeles?
Closing timelines vary by loan type. Conventional commercial mortgages typically close in 45 to 60 days. SBA loans take 60 to 90 days due to the government underwriting process. Bridge loans and hard money loans can close in 7 to 21 days, which is critical in competitive LA submarkets where sellers favor buyers with demonstrated speed of execution. Seismic assessments and environmental reports, which are standard in LA transactions, can add 1 to 2 weeks if not ordered promptly.
Is it better to invest in a strip mall or a single-tenant NNN property in LA?
Both formats have merit, and the right choice depends on your investment goals. Single-tenant NNN properties offer predictable income, minimal management, and straightforward financing, making them ideal for passive investors. Strip malls offer higher potential returns through active management, rent increases, and tenant optimization but require more hands-on involvement. In LA, strip malls in gentrifying neighborhoods can offer significant value-add upside, while NNN properties in established locations provide stable, bond-like cash flow. Both property types are financeable through Clear House Lending's loan programs.