California Major Cities to Get Funding for Housing and Development

Newsom wants to allocated $2B towards housing and other development in areas like DTLA, to help move people away from rural fire areas, tackle housing shortages, and climate change.

https://www.latimes.com/california/story/2022-01-13/newsoms-latest-housing-fix-more-californians-living-downtown

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). "

Downtown Area Highlight: Arts District

Downtown really is its own world. While prices have gone up around the country in most cities (5.1% from 2015!), DTLA is in my opinion one of the most exciting and resilient places. Even after the crash of 2008, prices have been steadily rebounding and are now well past the 2007 height. More residents are living in the area. New businesses have arrived. And each week seems to bring about another exciting development.

One of the most thriving areas is the Arts District. I highlight the area because it has seen some serious value gains because of the exciting development and the lack of inventory. There are only FIVE loft/condo buildings in the Arts District, which is keeping demand high. In addition, some of the most exciting developments and destinations are happening in the area: SOHO House, Hauser Wirth Schimmel, At Mateo, Oficine  Brera, Bestia, The Row DTLA, and The Garey Lofts, Church & State, Shinola, Grow, Everson Royce Bar, La Kretz Innovator.

Sneak Peek of Upcoming South Park Condo - TEN50

First time since the Ritz Carlton was completed in 2012, new construction condos will be available for sale in downtown Los Angeles. Developed by Trumark Urban and designed by TEN50 is located on Grand and 11th, in the prime area of South Park, just a few blocks from the Historic Core and the Fashion District. Target move-in is November 2015. Contact me to preview the floorplans, amenities and finishes.

Just some of the highlights:
- Infinity edge pool
- Outdoor yoga deck
- Theater/Media room
- Corner Penthouse units
- Boutique style building
- Bertazzoni induction range, Bosch ovens, Liebherr refrigerators
- 24/hour reception
- Parking and storage

 

(Rendering from Photographer of TEN50)

(Rendering from Photographer of TEN50)

(Rendering from Photographer of TEN50)

Game Changing Development For Southpark

First it was L.A. live. Then came Evo, Luma, and Elleven that changed the area.  The next significant condo developments to change the area in the next few years and increase values for the surroundings:

1. METROPOLIS - 18-story hotel, 38 story condo, 40 - story condo,  56-story condo with luxury retail space.

2. FIG CENTRAL - 53-story and 38-story towers with luxury condos and the Roberto Cavalli  Hotel.

3. CIRCA - Two 35-story towers with approx 650 luxury apartments for lease.

4. 1020 S. FIGUEROA - 42-story,  650 unit condos and 32-story W Hotel.

5. TEN 50 - 25-stories, 121 boutique style condos.

Rising Prices in South Park

Just last year, South Park prices were hovering around $580-$640/sf. This year, a 1 bedroom condo at EVO sold for one the highest prices in EVO history at $714/sf. Luma and Elleven prices, along with Grand Lofts and Flower Street Lofts have increased in value. And the prices haven't slowed down largely due to the amazing transformation happening in the immediate neighborhood.

Just to name a few game-changing projects that are underway:

1. Metropolis luxury condos on Franscisco Street
2. Fig Central Condos and Roberto Cavalli Hotel on Figueroa & 11th
3. Ten50 Condos on Grand & 11th
4. Whole Foods Market on 8th & Grand
5. Fig South condos and retail on Figueroa & 12th

The Ever-Changing South Park Neighborhood

DTLA gets more well-rounded by the year. The majority of DTLA used to be historic buildings with a decent amount of 60s as well as 80s buildings that were developed along the financial district environs. Now there are sleek skyscrapers going up everywhere, and it's hard to keep up. South Park, with its large number of flat ground-level parking lots has undergone the most significant, skyline altering changes in recent years, and with every new building since 2009, the values of resale condos and loft has increased and rents continue to soar. What's fueling all this is the amazing development are projects such as The Ritz Carlton, The Courtyard Marriott, Fig & Central, where the Roberto Cavalli Club is set to be, and Metropolis, the luxury condo and hotel compound that will kickstart an influx of luxury boutiques coming in. It's also what's making South Park one of best investments.

Go Ahead, Raise the Rent

Landlords out there, you know that many of the buildings in DTLA are free of rent control, right? Just wanted to make sure. Buildings that were converted into condominiums are not subject to rent control laws. This is one of the reasons why those who are looking to buy an investment property love downtown. For in-depth information on rent control: http://lahd.lacity.org/lahdinternet/rentstabilization/tabid/247/default.aspx

DTLA Has a Long Way to Go

This sounds unlike what I normally say. But I mean it in the best way. When I started buying properties in DTLA a few years ago, there was only a fraction of the development and places to go...there's more than triple of that now, with lots more in the pipeline. In my opinion, downtown is only about 15% at its potential. Buying now is getting in early. Just ask someone from San Francisco or NYC why they're buying here instead of in Brooklyn or The Mission.

Metropolis - The Numbers Are Out

Those of you who are privy to the highly anticipated Metropolis development have been inquiring about pricing, and rightly so. But pricing wasn't available until now. With floorplans and features being solidified as we speak, these are luxury condos are expected to rival the Residences at the Ritz Carlton, but with even more amenities according to inside sources.

Prices for the first phase will begin in the low $500s and go up to around $3MM for the penthouses. Even though there's still time until completion (ETA is 2016!), the interest has been through the roof with hundreds on the waitlist, deposits and all. Waitlisters get first dibs on the floorplan/unit among other perks, and of course the deposit is refundable if you don't move forward. Send me an email if you'd like to get on the waitlist or to find out more about the Metropolis: yuri@sartparker.com.

Why Prices Are Keeping Steady in Downtown

For those of you who've been keeping up with the happenings in downtown, you'll know that the market has been hot. While some units are selling about 1-3% below asking, many are selling for at or over asking. This is because the development in downtown has been nonstop since the crash in 2008. Savvy investors are transforming the neighborhood and residents and visitors are coming by the droves. This is just a glimpse of what's to come to DTLA in the next couple of years, and this isn't including all of the wonderful new eateries, cafes and boutiques that are opening literally every week:

1. Whole Foods

2. Complete transformation of The Bloc shopping center

3. Empire Hotel

4. Case Hotel

5. Trader Joes

6. Broad Museum

7. One Santa Fe Arts Theater and Shopping Complex

8. 1st & Broadway Park

9. Wilshire Grand

10. Metropolis

11. Alamo Draft House Theater

12. Freehand Hotel

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.