With more than 12,000 luxury residential units under construction in Downtown Los Angeles, many in the industry are questioning whether there is enough demand to fill the cornucopia of expensive incoming product.
While it doesn’t provide a definitive answer to the question, a new report by Loftway, a brokerage specializing in loft sales and leases, gives some insight.
In 2015, the number of condo and loft sales Downtown decreased by 14 percent, according to the report. While prices continued to increase by 11 percent, they didn’t increase as sharply as they did in 2014, when there was a 17.8 percent hike.
A couple of Downtown loft buildings even sold units at lower per-square-foot prices than the previous year. At the Flower Street Lofts at 1130 South Flower Street in South Park, five units sold for an average of $420 a square foot in 2015, down 26.3 percent from the 2014 average of $570 a square foot.
The building that saw its prices increase the most was the Molino Lofts at 530 Molino Street. In 2015, eight units sold for an average of $495 a square foot, a 35 percent increase from 2014.
The priciest sale of the year was a unit at EVO South, which sold for $3.5 million. The cheapest sale was a unit in the Little Tokyo Lofts building, which sold for $270,000.
Meanwhile, rents at Downtown loft and condo properties continued to rise. They increased by almost 9 percent in 2015, to $2.67 a square foot a month.
Only four of the 34 buildings tracked in Loftway’s report saw rents decrease: the Douglas Building, Elleven South, the Toy Factory lofts and the Toy Warehouse. All of those decreases were under 4 percent.