The Market is Softening, But Inventory is Still Low

Several things have happened in the past few months. It's odd because it's a good time to sell, but it's also weirdly a good time to buy. Some of my thoughts and feedback from clients:

1. Interest rates have gone up. This has affected prices a tad. And yes, I mean only a tad. We're talking 1-3% price shavings from the summer. Meaning, prices are still very good if you're in the market to sell.

2. It's still a Seller's market, mainly because prices are still high and inventory is still low. So is it a good time to sell? Heck yes if you have equity or are needing to unleash.

3. While interest rates are hitting up to 5% depending the lender, I dare say it's still relatively cheap to borrow compared to 20 years ago. Interest rates are slated to go up a bit more in 2019, so that means if you are planning to buy in the next 6-12 months, now is probably a good time.

4. Rents are higher than ever. I can't believe the gorgeous 2+2 unit in a duplex I used to rent in Hancock Park 15 years ago for $1200/mo, is now renting for $4200/mo. That's about a 400% increase. What I mean to say, sadly, is that it's really hard to rent these days with prices so high. If your budget is under 3k, and you don't have a decent downpayment (10-20%) saved up, it's ok to keep renting. If your budget is about 4k, then it's probably better to think of buying something small in an up and coming area and holding on for 3-5 years, and then cashing out on the 100k+ equity you'll gain. Seriously, I believe the market will go up in certain areas while other areas will plateau.

5. Will the market keep going up 5-10% each year like it has since 2010? Likely no for the next 2-3 years. However, 5 years from now, some areas will. These are areas that are in transition, like West Adams, Glassell Park, Montecito Heights, Lincoln Heights, and the Fashion District & Art District in DTLA. There's just room to grow in these areas.

6. At the end of the day, real estate is about security, equity, and leverage, so whether you're selling to make a profit and trade up, or buying to build equity and peace of mind, if it's the right time for you, then that's all that matters.

Immaculate Loft in South Park with In-unit Laundry Room and Parking for Lease

Beautifully maintained loft with upgraded glass partition, stainless and stone kitchen island, upgraded glass shower doors, spacious laundry room, 1 parking space. 960sf provide ample space in this 1 bed, 1 bath South Park gem. Building has 24/7 front desk concierge & security, lush outdoor deck, BBQ, fireplace, and pool.

Asking $2750/mo.

Amazing Price on a 2 Bed, 2 Bath Split Level Corner Penthouse Unit in South Park

Rare Corner Penthouse Unit at the luxury 717 Olympic building in the heart of it all. The unit features amazing views from just about every room and bathroom. Spacious upstairs main bedroom with double walk in closets, a spacious ensuite bathroom with separate shower and soaking tub. he bedroom opens onto a beautiful landing that's perfect for an office space or sitting area, and further along is a private terrace that looks out onto the rest of the views beyond. The second bedroom or guest suite is downstairs, complete with two closets as well. An ample laundry room offers extra storage, and an open plan kitchen and living area complete this spectacular home. The building offer 24/7 concierge services, valet parking, plunge pool, fitness center, business center, wine storage, indoor and outdoor lounges, fire pit, outdoor terraces, media room and more.

Asking $8298/mo

Buying vs Selling in a Changing Market

ARGUMENTS FOR SELLING:

1. We've reached another height

2. There are talks of plateauing and possibly even microdips in the market

3. You have amazing equity and can upgrade from the starter pad to a forever home

Words of wisdom when selling: Be patient and smart. You will have to have your home in great shape and priced right with a local realtor who knows what's up in the area.

ARGUMENTS FOR BUYING:

1. Rents are through the roof, and still going up due to high demand and low supply

2. Why pay your landlord's mortgage?

3. Population in LA keeps growing

Words of wisdom when buying: Look at the big picture. Inventory is low, and it's still a seller's market. So bid wisely. Do not nitpick about overbidding 5k here, 5k there. Over a 30 year fixed, that's like $3/mo. And try to be less emotional about the things that can be changed, such as ugly carpets.

When Is It A Good Time to Sell, When Is It A Good Time to Buy?

Everyone can look back in hindsight and say "I should have bought in the crash." Then why did so many people jump ship and short sell in the crash? It's because everyone has different motivations, different circumstances in their lives.

There's no really right answer unless you know for sure where the market is heading, and if we could all predict the future, all of us would be in the 1%.

The best answer to the question of when to sell or buy is when you can afford to, and it's the right property.

If you can afford a house at what we're calling the "height of the market," then you should be fine. Even if the market dips, you can afford the payments (Please people, get a 30 year fixed and you're mortgage is like rent control for 30 years). Some people have bought at the height, but got some amazing interest rates, so they ended up just as good as other buyers who got locked into a higher interest rate at a slightly lower price.

If you're selling because you need to, or you want to upgrade, or you want to cash out on equity and get a better investment, go for it. We're at new heights so if you're looking to sell, then duh, this is the best time. If you're not needing to sell, there's no real reason why you should, and it's not like you're needing the cash right now, then hold onto it. You can always rent the place out for killer rents--just as prices are high, rents are even higher than ever before.

Live/Work Lofts in DTLA

Every week I get approached about live/work lofts, especially from artists. The reason is because these artists are getting kicked out of their studios for conversions or having their rents increased by 100%. It's always the same story. And some of these artists aren't having it anymore. They are buying their own spaces in live/work buildings.

The beauty of the live/work situation is that it is multipurpose. The space can often be shared with other artists or entrepreneurs during business hours who are paying you to use part of the space. Think of it like your own coworking space (that you own) or think of it as a duplex, where the other tenant is paying half or more of your mortgage. It's a pretty sweet situation, and best of all, you own the place so you are building equity. This is how you say goodbye to the unstable housing situation and unreasonable rent hikes.

...And Still A Sellers Market!

Tariffs, weird economic rumblings, cryptos, housing shortage, global warming...what a strange time this is. How does this affect real estate?

Real estate has been interesting in the last 10 years. It was a seller's market (prices going up!), then quickly turned into a buyer's market (prices crashed), and since about 2014, has been a strong seller's market. We're due for a dip (buyer's market!), yet the shortage of housing has been keeping prices high.

It's not helping that a lot of people have found that properties are a good way to grow their money rather than banks. The passive income due to high rents is often too good to pass up. And the Airbnb potential of properties is causing a shortage in rental housing, not just housing to buy.

Forecasts are pointing to a dip in about 2020. Of course nothing's perfectly predictable. But what do we know for sure? It's a Seller's market. Prices have been going up for about 10 years, and if the equity is there, and you're ready to trade up, there's no time like the present.

Flipping in DTLA

I've been getting requests from investors about flipping in downtown. Flipping is not as common in condos. It's just such a hassle to buy a condo, get board approvals, deal with building restrictions, and, with the way prices have been (especially in DTLA), sell for a modest profit at best.

But it does happen, and sometimes, it can be very easy. The best type of condo is often one that has been banged up a bit due to years of tenants living there. Appliances are in bad shape, cabinetry needs updating, flooring needs an overhaul, etc.

Typically, a condo that's been overhauled can fetch about twice the amount of remodel money put into it. For instance, a condo with a market price of $800k with a remodel that cost $75k can end up being worth $950k to the public. Not a bad return on your money.

What are the typical remodels that generate the most ROI?

1. Kitchen (Appliances help, but more than that, modern cabinetry and ventilation.)

2. Bathroom (Just changing out the sink makes a huge difference. Then of course, tiles are a big deal right now, and you want to err on the light color side)

3. Flooring (Worn, stained, dated flooring needs to be replaced asap! It's the biggest turn off for buyers)

4. Storage (Add an extra closet, pantry space, etc. So many options these days. The biggest cheat is a floating wardrobe that is fixed to the wall.)

5. Lighting (Please add nice, modern lighting to dull, dark spaces. Even $2k worth of electrical work to add more ceiling lights will hugely add to value)

6. Paint (Please choose flat white for your walls if in doubt. Do not go crazy with colors unless you have a designer who can put the room "together" for you. I know wallpaper is hot right now but honestly, it has to be done right)

Just Leased - Douglas Lofts #4D at 740sf - Highest Leased Price for Floorplan

Douglas Loft #4D - 740sf + 1 parking

North facing unit with views of City Hall and mountains.

Listed at $2450/mo, which was already just above market rates for the building, this studio ended up getting $2550/mo, the highest price ever paid for a rental for a studio in the building. Rentals are slowing down in general due to an influx of new construction competition, but good units are still going strong.

Apple Store Forging Ahead on Broadway

Photo: Tower Theater Group

After a long period of silence, the Apple store coming in the Tower Theater space on Broadway has made more movement. Renderings are hush at the moment, but something exciting while preserving the integrity of the historic theater. The opening might coincide with the Broadway Trade Center restoration across the street. 

Why Downtown is So Exciting

For those of us who have properties in the area, it's been exciting. Growth has been steady year over year since the crash. Some of my clients are at 100k up on their investment in just 12-18 mos. Most are about 200k up on their investment. And few of them are more than 500k up on their investments in just 5 years. The point is, everyone is up on their investment. (Know which buildings to buy in, please do the homework or use someone who has the info!)

For those who are pioneers, DTLA is a blank slate. So many pioneers creating some very interesting spaces, shops, and experiences. And it's all in one dense area.

And most important of all, there's still a lot more to go. You wouldn't believe the plans in place for neighborhoods like Bunker Hill, or the areas just south of South Park. And the Produce District. And the Industrial District just north of Chinatown.

While some are saying it's too late to get in, I say we're only 10% there. That's exciting.

Pocket Listing Alert - Beautiful Rowan Loft on the 12th Floor with 30+ Feet of Windows

Unit #1205 is just below the Penthouse level, and features 2 beds, 2 baths, and windows that span the entire length of the unit. It's also the only unit that has a fireplace! Comes with 1 parking space. Skyline views and overlooks the Spring St Park for the ideal downtown view. Within a few blocks to Grand Central Market, Grand Park, Orsa & Winston, The Continental, Kazunori, galleries, Whole Foods, and so much more. Asking $4500/mo or negotiable on a longer lease.

What $1Million Buys you in DTLA

For about $1 Million:

Photo: TEN50 Trumark; U-Click

Building: TEN50 

Neighborhood: South Park

Floor Level of Unit: 8th

SF: 1140, 2+2 with 2 parking spaces

PRICE: 980k

Loftway

Building: EVO

Neighborhood: South Park

Floor Level of Unit: 21st

SF: 1170, 2+2 with 2 parking spaces

PRICE: 995k

The Agency

Building: Metropolis

Neighborhood: South Park

Floor Level of Unit: 22nd

SF: 843, 1+2 with 1 parking spaces

PRICE: 985k

Sad Facts About Current LA Real Estate

1. You will likely have to overbid to be in the running

2. Rents are super high everywhere

3. Cash buyers are lowballing and Sellers are taking the bait (but then Sellers do a multiple counter back and drive the price right back up)

4. Unless your budget is about 1Mil (Eastside) and 2Mil (Westside), you will likely be getting a less than perfect looking house

5. Prepare to downsize from what you originally wanted

6. Prepare to expand your search into areas you never thought you'd venture into

7. Prepare to submit noncontingent offers

8. Expect to forego any requests for repairs--Sellers are basically not wanting to deal with buyers who pick apart the property

9. Prepare yourself for a possible rejection or what seems to be an unreasonabl counteroffer to your offer

Some Of Us Are Wishing For a Bubble

This is crazy, but I've heard more homeowners and renters wish for a bubble lately. Yes, even homeowners. (Note: these are the same folks who bought in the crash and will do it again every time--I know I would).

When things crashed, there were many jumping ship, and just as many were clamoring to scoop up one, two or more properties. It sounds like crazy speculation but really, it's logic. These same properties at the crash were selling for crazy low prices such as $200-400k. Previously they sold for double those numbers. When you know that demand for these homes were there at double the price, why wouldn't you buy that property when it's half the price?

That's the past, and with no real bubble in sight for the next 2-3 years, prices are high. Some say it's unsustainably high, but that's all relative. Our friends in NY and London and SF are laughing at LA prices because they are so "low." In fact, folks from these cities are buying a second home in LA.

So what hope is there when inventory is low and prices are high and you want an investment property or a first home because renting sucks?

Two things:

1. You have to take advantage of the still very low interest rates

2. You have to give up the fantasy of buying a 3+2 in Silverlake or a 2000sf loft in DTLA for $600k.

Hot areas that are half dumpy but cleaning up:

1. Frogtown
2. Atwater Village
3. Glassell Park
4. El Sereno
5. West Adams
6. Leimert Park
7. Lincoln Heights
8. Garvanza
9. Hermon

Areas that people say are hot but will probably take 10+ years to see ROI:

1. Boyle Heights
2. East LA
3. Inglewood
4. Compton
5. Cypress Park (Some parts)

Areas that are so hot, it's over:

1. Echo Park
2. Mt. Washington
3. Montecito Heights
4. Highland Park

Pocket Lease at Eastern Columbia

Beautiful 12th floor unit facing the glorious Orpheum Theater. Off market! $4200/mo. Nearly 1500sf! Viking Kitchen, Kelly Wearstler bathroom, chic+luxe DTLA living.

Sneak peek below:

AirBnB Causing High Rents?

More and more articles are coming out stating that AirBnB is contributing to the high rents. It's hard to say if this is true across the board, but there seems to be some merit it it. What it comes down to is that Landlords are laughing and renters are getting salt poured on wounds. Activists in LA and NY are taking measures to fight AirBnB.

According to the NY Times:

In Manhattan’s Hell’s Kitchen and Chelsea neighborhoods and the Midtown Business District, which accounted for about 11 percent of all Airbnb listings in New York City in 2016, average monthly rents increased by $398 between 2009 and 2016, of which $86, or 21.6 percent, was a result of Airbnb’s presence, the report said. In Greenpoint and Williamsburg in Brooklyn, the study said, rents went up 18.6 percent in those years because of Airbnb listings.

Airbnb makes it easy to rent apartments to tourists, taking units off the market for full-time residents, the report said.

“For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why,” the city comptroller, Scott M. Stringer, said in an interview. “It’s just simply supply and demand. Fewer apartments to rent means higher prices, and that’s the Airbnb effect.”

According to the Wall Street Journal:

Researchers looked at rents and home prices in the 100 largest metro areas in the U.S. between 2012 and 2016. They found that a 10% increase in Airbnb listings leads to a 0.39% increase in rents and a 0.64% increase in house prices.

From the LA Times:

The rental crisis is real: Far too few units are available, and residential rents are far too high. Airbnb does contribute to the problem. Landlords remove rental units from the long-term market because they can make more money from short-term Airbnb rentals. Reduced supply, coupled with constant demand, means higher prices.

What really matters, however, is not whether Airbnb drives up rents — it's by how much. And the truth is that we don't know the magnitude of the problem, because it's been insufficiently studied.

Airbnb critics often cite a 2016 article in the Harvard Law and Policy Review that claims the service has caused rent increases approaching 3% in some Los Angeles neighborhoods. 

Are We In A Bubble?

What a crazy time in real estate--again. Prices are high, inventory is low, people with cash are buying left and right, open houses on good homes are a zoo and bidding wars are still happening.

What's the difference between now and 2007? A lot.

1. Inventory is very, very low. Sellers aren't selling. That's a lot of why good properties in good areas are mobbed by buyers who are ready to go.

2. Rents are super high. Unlike the last time, when rents were very low, right now, rents are super high. LA is having affordability issues. (Well, not compared to NY and SF). More renters are in the buying market because they are sick of paying skyrocketing rents.

3. Interest rates are still low, and while lending is getting more creative again, it's still hella conservative compared to the last time. I remember when I refinanced my place in 2006, and they basically didn't ask for any paperwork except a bank statement and property tax info. The appraiser didn't even come out to the property--they just did it using the MLS and google maps. Things have changed.

That said, it's important to know that the days of buying low and selling high within 1 or 2 years are pretty much gone. If you're buying now, the only way to gain substantial equity is to buy and hold for 5-7 years, or buy a fixer and do some rehabbing to add value. Example: My client just bought a Culver City adjacent dump for about 5k. Recent solds on the same street are $1Mill. With real estate, what you do and when you do it are very key.

As Long as Inventory is Low, Prices High, and Yet People Are Still Buying

Interest rates are now up to 4.4% for a 30-year fixed--it was 3.95% just a few months ago. Normally, this causes some slowdown. But things aren't normal. Inventory is unusually low. And the increase in the interest rate wasn't enough to scare off buyers.

This means that prices are still high. So why are people still buying? Because homeownership can be pretty lucrative if you can wait out low cycles. The average home owner has a net worth of $195,400 while the average renter has an average net worth of $5,400.

Plus you aren't subject to the pains of having to deal with annual rent increases. Or awful landlords. And you can make changes to your property. You can AirBnB your place if it's a single family home. You can add roommates. And you can deduct your mortgage interest and property taxes. And best of all, if you've done a 30-year fixed loan, your monthly "rent" won't change for 30 years!

Homeowner Equity Gains 12.2% between 2016-2017

A lot of homeowners who bought in 2016 are now enjoying about 12.2% in average equity, according to CoreLogic's Home Equity Report. In downtown, 2018 is up about 3-5% (depending on the building) since 2017. So prices are still climbing, but at a slower pace. Inventory is just too low.

Doom and Gloom News for Buyers in LA

I had to do a post about this because all this doom and gloom about not being able to buy if you're a prequalifed buyer is mostly BS. Of course if your budget is under 500k, then yes, you will have very slim pickings. But you can still buy, you just need to reset your expectations.

My advice? Sit down with a lender and see exactly how much you can borrow. You might be surprised. I had a client who ended up qualifying for 100k more in his purchase price because his lender told him that the he just needed to wait until his car was paid off in a couple of months.

Maybe you need to buy a condo instead of a house? Maybe instead of Silverlake near the reservoir, you need to look into Atwater? Maybe that 1600sf loft you want should in reality be more like a 1000sf loft? You can't expect to have the same stock available to you as 7 or 8 years ago. Prices are up and inventory is low.

And remember, your first home doesn't have to be the end all. My last client who downsized into a smaller house because that was all they could afford, ended up renting out this house and buying a larger forever home. One property became two!

"Let's See What Happens in the Market Before Doing Anything"

A lot of sellers and buyers say "Let's see what happens in the market before I pull the trigger."

Usually by then, it's too late.

I always ask myself these 4 questions:

1. Have I made a lot of equity in my property?

2. Are things starting to plateau?

3. How long should I hold on this property? So far, holding has worked out well if you bought within the last 7 years. At this point we all have to decide if it makes any more sense to hold. The gains we've seen in the past 7 years are slowing. It may be another 7 years before we see increases like those again.

4. At the same time, historically low interest rates are going up. Do I wait to buy because prices might come down, and, risk a higher interest rate?

It's harder to get clear cut answers these days. But if you've been thinking of selling for years, now is probably one of the best times because we've surpassed heights again.

If you're thinking of buying, you need to really consider the interest rate lock. Sure the rates might come down and you can refinance, but what if they continue to go up? 

Housing Shortage. People Moving to LA. Prices Up.

There have been a few articles floating around about people moving out of L.A. due to the expensive housing market. This may be true, but does the city feel any emptier? Certainly not to me.

If anything, it feels way more crowded everywhere in the city than it did 5 years ago. More cars, more people, more crowds everywhere. And lately, half of my clients are from out of town. They are moving from places like NY, SF and the OC. Many are moving for jobs. Many are moving for a different pace of life. In my experience, more people are moving to LA than ever before.

And there is a housing shortage, and when there’s a shortage of anything, what happens to the price? It goes up.

Interest Rates Could Easily Rise to 5% in 2018

We knew the ultra low interest rates wouldn't last forever. But the time is coming for a nearly 5% 30-year fixed.

While still historically low, some surveys by C.A.R. are showing that a small portion of buyers will opt out if rates hit 5%.

Two comments:

1. Buyers who opt out are being very short sighted in my opinion. You're either going to get locked into still historic lows, or you can refinance if the interest rate ever drops again. No brainer.

2. Sellers can anticipate a slight softening of the market due to less buyers. 2019 is expected to have even higher interest rates. Meaning 2018 could be a very good time to sell.

The Art of Trading Up

A successful stock broker friend told me a long time ago that there's only one rule he lives by: "Buy low, sell high." It doesn't matter that you've bought low now and sold high a year from now, or 10 years from now, it only matters that you bought low and sold high.

This is also the key to real estate. If you do this, then you can really start to rake in that passive income.

But you can't just sell high and spend it all--you need to trade up. If you've made a killing on RE in the past 2-3 years like many of my clients did, nearly all of them ended up with either

1. Multiple properties
2. Multi-family properties
3. A wow factor trade up single family home

The ones that traded up to a larger pad in a better neighborhood will still make a killing because their neighborhood keeps getting better.

The ones that doubled their property portfolio or added multi-plexes into the mix, are now happily collecting passive income that increases every year (not to mention their prop values keep going up due to the LA housing market demand) They've basically turned their first profits into cash cows.

Congratulations to all my wonderful clients who are positioning themselves to retire a little earlier!

If Prices Are So High, Why Aren't People Selling?

Sure there's a lot of equity out there. Owners can make a killing. Then why are so few owners not selling?

Prices are too high to rent. If they sell, the rents are way higher than their current fixed mortgage.

Prices are too high to buy. If they sell, it's hard to upgrade these days unless you move to a different location. Most people might make a lateral move or even downsize, but it's hard to upgrade.

At the end of the day, it's better to own.

Condos and Lofts Selling Nicely in DTLA, Rentals Softening a Tad

According to The Real Deal, "As Los Angeles grapples with a severe affordable housing crisis, a new study shows condo and loft sales remain strong...Prices in DTLA continued to increase, rising almost 4.5 percent year-over-year to $697 per square foot. That’s a more modest jump than last year, which saw prices rise up by 11 percent."

Rentals, however, are showing a softening, but still not a dip in prices. Competition is fueling this. 

Bitcoin + Real Estate

No, Bitcoin is not a Federally recognized currency in the U.S. (a fail on their part).

Yes, Bitcoin is accepted to purchase real estate. The reason is because the cryptocurrency is transferred to the Seller from the Buyer, so as long as both parties agree, it's ok. However, there are certain fees in escrow (if using an escrow company) that must be paid by "legitimate" currency.

A Frank Lloyd Wright house in Berkeley is accepting Bitcoin.

Buying a condo in DTLA? A house in the Hollywood Hills? You can swing a Bitcoin deal as long as you have your ducks in a row in cold hard Bitcoin, or even if you're financing a portion of the deal with Bitcoin--you just need the right lender.

Sounds Crazy, But Renting More Affordable Than Buying in LA

The rent increases in LA have been unreal. For $2500/mo, you might find a 650sf studio in Downtown without parking.

If you think Renters have it bad, Buyers actually have it worse. The most recent Home Price Index from CoreLogic showed home prices increased 7% from November 2016 to November 2017.

"Renting is now more affordable than buying a home in the nation’s top 14 most populated counties including Los Angeles County, California; Cook County, Chicago area, Illinois; Harris County, Houston area, Texas; Maricopa County, Phoenix area, Arizona; and San Diego County, California."

Rent prices are also continuing to rise, though, so ultimately, it's still more ideal to own and get into a 30-year fixed mortgage rather than dealing with the 4-6% rent rises LA has been experiencing every year. 

Great Article on the [Second] Arrival of DTLA

From Bloomberg
https://www.bloomberg.com/news/articles/2018-01-05/where-to-eat-sleep-and-shop-in-downtown-la

"The emergence of Downtown Los Angeles, dubbed DTLA, is no news flash: The area has been on the rise since the late 1990s. But that was the start of a long uphill climb. By 2009, it had already undergone the transition from bleak badlands to vibrant cultural mecca, thanks to early pioneers like the L.A. Live entertainment complex and the Standard Hotel.  Since then, a slew of new hotels, restaurants, and museums have joined, and the neighborhood is showing no sign of slowing down.

'I don’t think it would be inaccurate to say that 15 years ago, it was an urban wasteland,” said real estate developer Tom Gilmore, referring to DTLA. An architect by trade, Gilmore almost single-handedly spearheaded the inner city’s rejuvenation. He first took note of DTLA’s architectural stock in the early ’90s: The inner city was a ghost town with potential, brimming with abandoned beaux arts and art deco buildings.' 

Gilmore’s strategy? To purchase and convert four old buildings into loft apartments, then add bars and restaurants. The timing couldn’t have been better. Simultaneously, Staples swooped in to build its 21,000-seat arena, and Lillian Disney (Walt’s wife) had lined up Frank Gehry to design a metallic curved concert hall—venues that were sure to draw thousands of visitors.

Those three projects and the Broad Museum have been cornerstones to a $20 billion investment in DTLA—with cash coming not just from Gilmore, but from a handful of forward-looking hoteliers, foreign companies, the city of Los Angeles, and several private sources. 

In the past 15 years, more than 3,500 hotel rooms have been added within the DTLA area, with several notable newcomers arriving in 2017, such as the 889-room InterContinental (now the tallest building on the West Coast, at 73 stories) and the offbeat, $30 million Hotel Figueroa, a redo of a 1926 icon.

The neighborhood’s highest-profile opening yet, the NoMad, is coming this month to the historic Giannini Place building. After standing empty for 17 years, it’ll now have 241 Italian-inspired rooms designed by Jacques Garcia, a library, a rooftop pool, and a restaurant by Daniel Humm and Will Guidara (of New York City’s Eleven Madison Park). A Soho House is reportedly on its way, too, this summer. 

To Gilmore, these are the brightest signs yet of the neighborhood’s arrival. “When a tastemaker brand like the NoMad comes in, you realize that whole block is going to change because of them, and you know that the bump from that is going to be significant,” he said.

Balancing out the big names is Row DTLA, a 30-acre complex of historic buildings that has been overhauled into a creative district: It includes a smart collection of independent retailers, businesses, and restaurants, and draws up-and-coming talent by offering short -to medium-term pop-up leases. That’s what allowed French independent menswear label Bonaparte 13 to open its first permanent store in the U.S. here, after testing the waters.

'They’re carefully curating the stores that come in here with a strong bias toward independent retailers,' said Andy Griffith of A+R, a stalwart furniture company in L.A. that recently opened at Row DTLA. Joining him in the neighborhood are other cult brands that have found standalone spaces. Locally born clothing brand 3.1 Phillip Lim recently opened a concept store in the Arts District, and Korean eyewear brand Gentle Monster opened its second U.S. store wedged between the historic Orpheum and Tower theaters. 

For all its progress, DTLA is far from finished. Gilmore, for one, says the area is only halfway there. There are major projects still under way: the renovation of Pershing Square and the addition of the Regional Connector Rail, part of a $1.7 billion high-speed rail project that will link a trio of lines (it’s expected to be completed in 2021). "