10 Things About the Current State of Real Estate in DTLA

While this post is dedicated to DTLA, much of it applies to the overall Los Angeles housing market. 10 things to note:

1. Hard to believe that in 1984, average 30-year fixed mortgage rates were over 14%. Rates have since steadily declined, making it much cheaper to borrow money. While 2012 had some real historic lows (3.35!), 2014 is proving to still be super low at about 4.2% YTD.

2. For some buildings in DTLA, the prices have now reached above the height of 2007. Many of those who were under water are now able to sell, but these homeowners are optimistic and are waiting for prices to increase further before selling. With all the new walkable development happening, many homeowners who once had thoughts of selling are now asking themselves, why leave?

3. According to The MLS, the average rent in DTLA for a 1 bedroom was about $2100 in 2009. Average rent price in DTLA in 2014 was $2300 for a 1 bedroom. Higher than the average rent increases plus no rent control is why those who want to have cashflow-positive investments (including me) are buying in DTLA.

4.According to Downtown News, more than 5000 residential units are being built in DTLA in the next 5 years. Of them, less than 10% will be condos. The rest will be rentals. You can bet the demand for condos will continue to be very high in the coming years. And this means higher prices for condos.

5. According to the DCBID, currently there are more than 52,000 residents in DTLA, up 15% from 2011.

6. According to the DCBID, the average income of a DTLA household is $98,700/year. And you wonder why properties are getting really expensive--people with high incomes are buying and renting here.

7. There are more than 20 coffee shops now within a 1-mile radius from the center of DTLA. And most have opened doors in the past 2 years. We all know what that means.

8. The average price per sf in downtown in 2011 was approximately $347/sf. In 2014, it's $546/sf.

9. DTLA has the largest network of the public transportation in all of LA, thanks to the Union Station. The regional connector and the Streetcar will further enhance the accessibility and revitalization.

10. Clean tech incubator labs will soon be inhabiting a reused warehouse in the Arts District. The hope is that DTLA will be the future center of clean technology.

SOLD FOR DOUBLE THE ASKING - Unusual Opp for a Raw 1800sf Loft for $179k - Little Tokyo Lofts #106

This type of opportunity is rare in this market. This 1800sf mutlilevel loft is asking $179,000. The catch is that it's pretty raw. Forget about the drywall--I'm talking about plumbing, ducting work, and most likely electrical and potentially some foundation work. Inspections will tell. But at this price, this is a dream project for an architect's or anyone with a vision and some cash to make it happen. This will likely go over the asking price. Open house Wednesday 8/27 from 11-2pm.

Courtesy of Rhett Winchell of Kennedy Wilson

UPDATE: 40% RESERVED - Getting In Early on a New Development - Metropolis

Look around downtown and see if you can count the number of new construction sites. There's a lot. Among all the development, there are about 5000 residential units to come on the market in the next 2-5 years. Among them, only a fraction (not even 10%!) will be condos/lofts that you can purchase. The rest are slated to be rentals. Because of this low inventory of condo housing, developments such as the new phase of Barker Block and Beacon Lofts sold out within a couple of months. And despite the steady increase in value of condos in downtown since the crash, many homeowners aren't selling because they see this as just the beginning of where DTLA should be.

This is why it's so important to get in early on new developments. You not only have first dibs on the choice units in a building, but can often have the pick of the litter on upgrades, parking spaces and even get financing incentives. The latest project underway is Metropolis, which is a luxury highrise condo/hotel/retail complex that will change the skyline of downtown. Units will range from 510sf studios to 2600sf split level Penthouses. Pricing TBD. Early registration is key, so email me if you'd like to get on the list for advance information. Some renderings below, and the site where grading is well in the works.

DTLA EVENT ALERT - Grand Central Market + KCRW "Good Food's Night Out"

If you haven't been to GCM lately, you REALLY need to stop by. In the past 6 months the beloved market has experienced a rush of new eateries, from Eggslut to McConnells Ice Cream, and now you can partake in a tasting event this Friday, August 22 from 7-10pm. KCRW's Evan Kleinman will be hosting and you can sample select special goodies from Wexler's Deli, Olio Wood Fire Pizzeria, Sticky Rice Thai Food, Horse Thief BBQ, DTLA Cheese and Valerie. Of course you'll have all the other food stalls to wander to as well. RSVP on Facebook here!

SOLD AT ASKING - Art Deco Corner Unit for Sale - Eastern Columbia #404

Newly available is spacious 1610sf Southeast facing unit in the Art Deco Eastern Columbia building, developed by The Kor Group. The unit features plenty of huge windows, polished concrete floors and views of Broadway. Comes with 1 assigned parking space, and building amenities include a 24-hour concierge, gym and fabulous rooftop pool. Walkable to Spring Street, Ace Hotel, Umami, Figaro, Alma, Pellicola, Sparkle Factory, Grand Central Market, and more. Priced to sell at an amazing price of $795k for 1610sf of space. This building is also Mills Act approved.

 Courtesy of Sharon Kobold, Weichert Realtors

SOLD - Huge Live/Work Corner Warehouse Loft - Barker Block #256

True live/work corner loft in the Barker Block building with 1660sf of living space. Designed by The KOR Group, the building boasts a lovely rooftop pool and gym--both with views for miles, courtyard areas and an art exhibition tunnel. Plus it's directly across the street from Urth Cafe, perfect for that morning coffee run. The stunning oversized loft features original wood beams, beautiful hardwood floors, and fantastic Southwest views, 2 bathrooms and 2 assigned parking spaces. Listed at $968k. 

SOLD - Live/Work Pied a Terre in Arts District - Barker Block #554

True live/work loft for lease in the Barker Block building with 740sf of living space. Designed by The KOR Group, the building boasts a lovely rooftop pool and gym--both with views for miles, courtyard areas and an art exhibition tunnel. Plus it's directly across the street from Urth Cafe, perfect for that morning coffee run. The open plan loft features original wood beams, beautiful hardwood floors, and easterly views for miles. Includes one assigned parking space. Listed at $554k. 

Where Are All the Artists Moving To?

This is a question that has been posed to me by several of my long-term investor clients. The once affordable Arts District now has properties that often sell for close to $1MM. You can hardly find a 1-bedroom 850sf studio for under $500k. Aside from perhaps the 9th & Broadway intersection, the Arts District has seen some of the quickest and most significant changes since the revitalization of DTLA as a whole. So where are the resident artists who can no longer afford the huge loft spaces moving to? Many are moving to Lincoln Heights, where you can still get random warehouse spaces for a fraction of what you'd pay just a few miles south. The Brewery, the largest arts colony in the world, is another exclusive compound for many artists. Another area that is being eyed is the pocket between the Arts District and the City of Vernon, where it's mostly warehouse structures, but no-man's land after 6pm. It's an interesting time to be witnessing the spread of what has begun in DTLA, and realizing that soon DTLA may become the center of it all, as it once was back in the day.

SOLD - 1300 sf Live Work Warehouse Loft - Barker Block #341

True live/work loft for lease in the Barker Block building with 1300sf of living space. Designed by The KOR Group, the building boasts a lovely rooftop pool and gym--both with views for miles, courtyard areas and an art exhibition tunnel. Plus it's directly across the street from Urth Cafe, perfect for that morning coffee run. The stunning oversized loft features original wood beams, beautiful hardwood floors, and fantastic westward views of the downtown skyline. Includes one assigned parking space. Listed at $668k.

SOLD - Industrial Penthouse Loft in the Heart of South Park - Flower Street Lofts #408

True live/work loft for lease in the legendary Flower Street Lofts building. Once a UPS shipping hub, the building boasts lush foliage and shaded areas that make it feel like you're in an oasis in the middle of the city. This stunning penthouse features skyline views, extra tall 14" ceilings and an open and airy layout with the bedroom in a separate nook. The spans almost 1400sf and comes with 2 covered  and assigned side-by-side parking spaces. Walk to Restaurant Row, the new Whole Foods, Ralphs, Staples Center, Historic Core, Central Library and more. Listed at $625k. 

 Courtesy of Anh Tran, Keller Williams Larchmont