Downtown LA's Catching Up to Silicon Beach. Here's How.
Downtown LA is becoming more vibrant, but it still lags behind Silicon Beach in job growth in the city. Still, pricing and competition have increased in LA, according to the most recent Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey.
Allen Matkins partner Tony Natsis says the market has been waiting for pricing to squeeze tenants to Downtown LA, but it still hasn't happened quite yet. Still, he says there are more cranes in Downtown these days than there have been since perhaps the late '80s. Tony says Downtown needs a tenant to take 300k SF to start the ball rolling. At Bisnow's recent Evolution of Downtown LA event, Gensler CEO Andy Cohen said that time is coming. Click here to see Allen Matkins' full video.
There's been tremendous growth in housing in Downtown LA, but that hasn't yet translated to business growth. In fact, despite tripling the number of new multifamily units in DTLA over the past 15 years—and another 22,000 proposed or under construction—there's still a major shortage.
Senior economist with the UCLA Anderson Forecast Jerry Nickelsburg says continued optimism throughout the state is supported by job and income growth and a lack of sufficient building supply. LA is no different.
Here's an inside construction shot Bisnow got of two massive towers, now known as Circa, set to pop up at 1200 S Fig across the street from Staples Center and LA Live in Downtown. The 1.6M SF project will include two 35-story towers containing 648 residential units and 48k SF of retail space. The project is a JV of Jamison, Hankey Investment Co, Falcon California Investments and Highlands Capital. It's designed by Harley Ellis Devereaux.
Allen Matkins partner John Tipton says Downtown has become a 24-hour city, but there will always be more demand on the Westside. Though pricing is better in Downtown, the decision-makers still live on the Westside and therefore, would rather work in the area. Click here to see Allen Matkins' full video.
Here's how markets across the state compare.