Downtown Los Angeles has become the breadbasket of city development, with more than 170 residential, office, hotel and retail projects in the pipeline, according to a recent study.
A DTLA 2022: Outlook and Insights analysis by the Downtown Center Business Improvement District points to a real estate resurgence in the heart of Los Angeles, the Los Angeles Daily News reported.
“We are currently tracking 43 projects under construction and 130 projects that are in the planning process,” Nick Griffin, executive director of the city business improvement agency, told the newspaper. “The number of projects that are either proposed or under construction in Downtown L.A. is pretty significant. We see a steady flow in the coming years.”
Downtown Los Angeles takes up 1.4 percent of the city’s footprint, but is home to 47 percent of the city’s 40 million square feet of office space, and 19 percent of its job base.
It also contains 17 percent of L.A.’s 4.3 million square feet of retail space and 18 percent of its 44,500 hotel rooms.
Like in other major U.S. cities, Downtown LA was heavily impacted by stay-at-home orders during the height of the pandemic, when trips to the downtown area plunged. Remote work has also transformed the office market.
But 2021 saw a substantial recovery in visitation, the report said, with the housing bouncing back stronger than ever and hospitality regaining much of its losses.
Downtown LA’s residential occupancy rate for the fourth quarter of 2021 was 94 percent, up from 88 percent a year earlier. The average rental rate was $2,759 per unit, compared with $2,400 in the fourth quarter of 2020.
The office vacancy rate was 20 percent, up from about 16 percent a year earlier. Retail vacancy fell to 6 percent from 7 percent in the fourth quarter 0f 2020, and hotel occupancy stood at 54 percent, up from 40 percent during the fourth quarter of 2020.
Early in the pandemic, there were nationwide fears of a residential exodus from downtowns. But the study shows residents living in the area are mostly committed to staying put. Twenty-five percent plan to live Downtown for 10 or more years, 40 percent plan to stay another three to 10 years, 26 percent plan to stay one to two years and 9 percent expect to stay less than a year.
Billions are now being spent on current Downtown developments.
The Ratkovich Co., based Downtown, is now constructing a 16-story, mixed-use tower of glass with 220,000 square feet of commercial and office space at 800 Wilshire Blvd.
“I’m more optimistic than I was before about the recovery and resurgence of downtown,” Brian Saenger, its president & CEO, told the newspaper. “Being an office dweller, I wasn’t sure what the future would look like based on the number of people I see coming downtown and frequenting restaurants near my office.”
Other major Downtown projects include The Grand LA, a 45-story, $1-billion mixed-use development designed by Frank Gehry. The nearly finished project will include 400 residences, a 28-story, 305-room hotel, 12,000 square feet of meeting rooms and 164,000 square feet of shops and restaurants.
Angels Landing, a $1.6 billion, twin-tower luxury hotel project being built in L.A.’s Bunker Hill neighborhood, is slated to be finished before the 2028 Olympics. The 1.2 million-square-foot mixed-use development by MacFarlane Partners and Don Peebles will also contain condominiums and apartments, shops and restaurants and a transit-adjacent urban plaza.
Ato, a seven-story, mixed-use development in Little Tokyo by etco Homes, will include 77 apartments, 2,500 square feet of retail space, a rooftop pool and lounge, an outdoor theater and a fitness center. It’s slated to be finished this year.
Alloy, a 35-story mixed-use tower being built by Carmel Partners at 520 Mateo St. in the Arts District, will contain 475 live/work apartments, 105,000 square feet of offices, more than 18,000 square feet of ground-floor shops and restaurants, and a 650-car garage. The building had been tied to alleged corruption at City Hall.
[Los Angeles Daily News] – Dana Bartholomew