Why DTLA is So Hot

The real estate situation in downtown these days can be summed up in two ways: Homeowners are thrilled at the rising prices and buyers are frustrated at the rising prices. Many are wondering when the prices will go down. In my opinion, prices won't go down because prices are similar to the prices in 2007. The same condo bought in 2007 is still around the same price now, if not a bit higher. It's as if prices have stood still for nearly a decade. Now, if you bought in the golden window of 2010-2012 like I advised most of my buyer clients to do (as well as myself), and you still own that property (myself included), then you killed it.

So why is DTLA showing signs of bigger increases than other parts of LA? A few reasons:

1. DTLA is still way more affordable than the Westside. $2500 per month in downtown will get you a highrise condo with a pool, spa, front desk security, parking, and dog run. In the Westside, the same price will get you a 3-story late 60s walkup with carpets and a 90s kitchen.

2. DTLA condos have character. You get a lot more character in a historic former bank building that is designated with the Mills Act than with a 70s aluminum-windowed box. Where else in L.A. can you find such a high concentration of historic buildings?

3. DTLA walkability & transportation. With markets (including Whole Foods), bars, restaurants and shopping centers springing up all around, it's getting easier and taking less time to stroll over to run errands and just enjoy nightlife without thinking of the drive home. Uber and Lyft is highly concentrated in DTLA, and costs about $6 to get from any point within downtown. Plus the Metro will take you straight to Santa Monica soon--it already goes to Culver City and Hollywood!

4. DTLA is just beginning. You know when investors from New York and San Francisco start to snatch things up, things are happening. Savvy investors have seen areas like SoHo, Brooklyn, SoMa go from blight to some of the most expensive real estate in the world. And they are buying up trophy buildings and attracting a new type of retail and commercial clientele. The Ace Hotel is a prime example. Soon after you had Acne, APC, Oak, Aesop and Tanner Goods follow.

5. DTLA and rent control. Investors, this is for you. The fact that so many people spend their hard earned money on a duplex that generates what's essentially 1980s income is beyond me. Because nearly all residential property in DTLA was developed into residential housing well after 1978, rent control rules don't apply. This makes downtown a very nice place to invest.