Click here to load reader

Downtown LA Market Report - Downtown Los Angeles

  • View
    220

  • Download
    1

Embed Size (px)

Text of Downtown LA Market Report - Downtown Los Angeles

  • Downtown LA Market Report

    YEAR-END 2015

    Downtown Center Business Improvement District

  • 2 Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    Founded in 1998, the Downtown Center Business Improvement District (DCBID) is a coalition of nearly 1,700 property owners in the central business district united in their commitment to enhance the quality of life in Downtown Los Angeles. The organization has been a catalyst in the transformation of Downtown into a vibrant 24/7 destination.

    The mission of the Economic Development team is to improve and revitalize Downtown Los Angeles and bring investment and new businesses to the area. We provide special services our property owners, commercial and residential, and to potential investors in our district.

    Research and Information Events and Marketing Monthly Housing and Office Tours Customized Tours and Reports

    Whether you need information on new construction, introductions to local decision-makers and influencers, or you just want to learn more about Downtowns dynamic growth, we are the portal for information on all of Downtown LA.

    DEFINITION OF DOWNTOWN LAThe DCBID defines Downtown Los Angeles as the area bounded by the 110, 101 and 10 freeways and the LA River, plus Chinatown, City West, and Exposition Park. The projects contained in this report are within a portion of Downtown Los Angeles, shown on the map to the right.

    About the DCBID

    To learn more about Downtowns Renaissance and how to join us, visit www.downtownla.com.

  • 3Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    EXECUTIVE SUMMARY .............................. 4MARKET OVERVIEW

    Residential .................................................. 6

    Retail ........................................................... 6

    Office .......................................................... 7

    Hotel ........................................................... 7

    2015 OVERVIEW .......................................... 8

    DEVELOPMENT UPDATE

    Commercial Development Map ............. 11

    Residential Development Map ............... 12

    Under Construction ................................. 14

    Proposed .................................................. 16

    FEATURED PROJECTS

    Major Mixed-Use ..................................... 18

    Residential ................................................ 20

    Office ........................................................ 21

    Retail ......................................................... 22

    Hotel ......................................................... 23

    Civic & Cultural ........................................ 24

    SPOTLIGHT ON DTLA

    Local Media .............................................. 26 US and Global Media .............................. 27

    00

    Table of Contents

    6

    11

    24

  • 4 Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    With the Downtown Renaissance in full-swing, 2015 saw DTLA firing on all cylinders, with four quarters of growth in the five main sectors of the market.

    It was a record-breaking year for construction starts with a total of 18 new projects with over 3,800 residential units, 850,000 SF of retail space and 2 million SF of office space. 13 development projects were completed this year, bringing almost 2,000 new apartments to the market.

    Significant transactions included the Ace Hotels sale and Sun Cals purchase of 15 acres in the Arts District. Rising Realty was a notable buyer and seller cashing out of the Pac Mutual Building and doubling down on One Bunker Hill and Figueroa Courtyard.

    ResidentialResidential demand held strong, with occupancy rates and average rents rising and the supply pipeline expanding with the announcement of several new large-scale developments, including mixed-use projects by The Hazens Group, Mack Urban and PRH.

    OfficeThe office market continued to improve, with vacancy rates down and rents up on total leasing activity of 2.3 million sf. Several major creative office projects got underway including the

    Broadway Trade Center and Row DTLA, while Bunker Hills towers were revitalized by projects like DesignHive by Brookfield.

    Retail The retail sector hit its stride with the opening of Whole Foods and Cliftons Cafeteria, and is poised for significant growth with The BLOC nearing completion and major projects under construction in every district, including At Mateo, Broadway Trade Center, and Oceanwide Plaza, for a total of almost 2 million sf of new retail space.

    Hospitality The hospitality sector got a boost with 2,500 hotel rooms under construction. New investments like the Sydell Groups Nomad Hotel and AEGs JW Marriott expansion will accommodate the growing number of visitors to DTLA, which hit almost 19 million in 2015.

    Civic & CulturalDTLAs civic and cultural sectors look bright as well, with The Broads launch an unqualified success, blue-chip gallery Hauser, Wirth & Schimmel preparing to open in the Arts District, and several major transportation, streetscape, and public park projects underway, including a complete re-envisioning of historic Pershing Square.

    $3.24 Average Class A Rent

    Per Square Foot

    95.8%Apartment

    Occupancy Rate

    4.8% - Retail Vacancy Rate

    2.4 million sq. ft. 2015 Total Office Leasing Activity

    $147.19 YTD Hotel RevPar

    Q4 KEY STATS

    Executive Summary

    974 New residential units

    opened in Q4

    1,260 New residential units

    proposed in Q4

    Whole Foods opened at 8th and Grand

    WeWork opened their second location in DTLA

    New plans announced for Downtown Car Wash site

    Q4 KEY HIGHLIGHTS

  • 5Downtown Center Business Improvement District

    Q4 2015 MARKET REPORTThe Desmond

    Level DTLA

    Whole Foods/eighth & grand

    Cliftons Cafeteria The Broad

  • 6 Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    RESIDENTIAL Strong demand kept rental occupancy rates over 95%

    while average rent rose to over $2,500 per unit.

    The long awaited openings of eighth & grand and

    Hanover Grand Avenue added 974 rental units.

    Over 1,200 residential units were proposed, bringing

    the total residential pipeline to over 26,000 units.

    Market Overview

    Q4 2015 Q4 2014

    Apartment Occupancy Rate 95.8% 93.6%

    Apartment Asking Rent Per Square Foot $2.78 $2.62

    Average Effective Rent Per Unit $2,508 $2,359

    Condo Sales 57 55

    Condo Price Per Square Foot $644 $564

    Source: CoStar, The Agency

    RETAIL The long awaited Whole Foods, occupying 41,000

    square feet, opened at the corner of 8th and Grand.

    The opening of Burlington added another national

    brand to the diverse mix of retail along Broadway.

    The Ratkovich Company neared completion of

    The BLOC, which will soon add over 150,000 sf of

    new retail and restaurants to the Financial District.

    Q4 2015 Q4 2014

    Vacancy Rate 4.8% 6.9%

    Average Rent Per Sq Ft $2.59 $2.47

    YTD Net Absorption 643,695 27,424

    Source: CoStar

    2m SQUARE FEET OF RETAIL SPACE UNDER

    CONSTRUCTION

    1.1m PROPOSED

    10,170 RESIDENTIAL UNITS UNDER

    CONSTRUCTION

    15,334 PROPOSED

    The BLOC

  • 7Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    Market OverviewOFFICE The former AT&T Center in South Park was renamed for

    USC, now the buildings largest tenant.

    Law firm Munger Tolles & Olsen renewed their 150,500 sf lease at 350 Grand, while Boston Consulting Group signed a new lease for 27,133 sf at City National Plaza.

    WeWork opened its second Downtown LA location a 93,464 sf space in The Gas Company Tower.

    2,515 HOTEL ROOMS UNDER CONSTRUCTION

    2,876 PROPOSED

    HOTEL British hotel operator Hoxton purchased 1060 S.

    Broadway for their first location in North America.

    Argentina-based Fn Hotels was chosen to operate

    the long-vacant Trinity Auditorium and Hotel Clark.

    Property owner Ben Neman submitted plans for a major mixed-use development including a 373-room hotel at

    the Downtown Car Wash site adjacent to LA LIVE.

    Q4 2015 Q4 2014

    YTD Occupancy Rate 75.4% 74.4%

    YTD Average Daily Rate $195.10 $181.43

    YTD RevPAR $147.19 $134.92

    Source: CoStar, The Agency

    Q4 2015 Q4 2014

    Vacancy Rate 18.2% 19.4%

    Class A Rent Per Square Foot $3.24 $3.21

    Overall Rent Per Square Foot $3.12 $3.04

    YTD Net Absorption 85,640 298,670

    YTD Leasing Activity 2.4m 2.1m

    Source: Cushman & Wakefield

    2.5m SQUARE FEET OF OFFICE SPACE

    UNDER CONSTRUCTION

    225,000 PROPOSED

    Wilshire Grand

  • 8 Downtown Center Business Improvement District

    Q4 2015 MARKET REPORT

    2015 OverviewSIGNIFICANT REAL ESTATE SALESProperty Name Address Buyer Seller Price

    Q4

    The Roosevelt 727 W. 7th St. Blackstone Group Greystar Investment Group, LLC $100 million

    One Bunker Hill 601 W 5th St. Rising Realty Downtown Properties Holdings $92 million

    800 Wilshire Tower 800 Wilshire Blvd. Onni Group Lincoln Property Company $81.3 million

    The Desmond 425 W 11th St. AEG Lincoln Property Company $48.5 million

    AMP Lofts Site 695 S. Santa Fe Greystar Real Estate Partners Bolour Associates $43.4 million

    1060 S. Broadway 1060 S. Broadway Ennismore of London Andrew Shayne $30 million

    Santa-Mateo Industrial Complex 520-532 S Mateo St. Carmel Partners

    Erwin &

Search related