New Hotels, An Influx Of Residents And A Construction Boom: Inside Downtown LA’s Rebound
In March 2021, Los Angeles Magazine reported that no area of LA had been impacted more by the pandemic than Downtown. When companies sent their employees to work from home, a significant portion of the 500,000 people who commute to this area daily was suddenly gone. And without Lakers, Clippers or Kings games, the bars and restaurants that relied on postgame business from Staples Center events were left without patrons.
One year later things are looking up.
“You can really sense the activity coming back,” said Downtown Center Business Improvement District Executive Director Nick Griffin. “We’ve had more than 77 retailers open since the start of the pandemic — 43 in 2021 alone — and residential occupancy rates and rents have already surpassed pre-Covid records."
He added that the hospitality market is coming back as well, driven by steadily increasing numbers of visitors to DTLA.
"Couple that with the number of new developments currently under construction and in the pipeline, it’s clear that Downtown will come surging back from this crisis," he said.
The Downtown Center Business Improvement District, also known as DCBID, has long been the leading source of information about Downtown, particularly to the real estate industry, thanks to its comprehensive Quarterly Market reports and surveys covering all the key commercial real estate sectors in the area, from office and retail to multifamily and hospitality.
Coming out of the pandemic, with sights set on recovery and revitalization, the DCBID has expanded and enhanced the resources it provides to investors, brokers and prospective tenants, with advanced tools such as its award-winning DTLA Virtual tour platform and its recently released DTLA 2022: Outlook & Insights report.
Griffin spoke to Bisnow about the report and the current state of Downtown LA.
“DTLA has proven itself quite resilient over the past two years, and is now poised for resurgence,” he said, referring to the strong numbers in the latest DTLA Market Report, which include high residential rent rates and nearly 4,000 units under construction.
The hospitality industry is rebounding as well, with DTLA hotels reporting four straight quarters of RevPAR, or revenue per available room, growth and 2,500 rooms currently under construction. And while the return to office has been slow, there has been recent momentum in leasing activity, punctuated by high-profile deals including Adidas and Forever21 choosing to relocate their corporate headquarters to Brookfield’s reimagined California Market Center.
The DTLA 2022: Outlook & Insights report demonstrates why the DCBID describes Downtown as “the city” of the city of Los Angeles — defined by an urban density that sets it apart from the rest of the region. Downtown boasts 47,299 employees per square mile vs. 3,490 for all of LA, 743 retail businesses per square mile vs. 75, along with 47% of the office space in Los Angeles and 19% of its jobs — all on just 1.4% of its land.
Downtown’s residential population has grown 37% over the last 10 years compared with 5% for the rest of the city, and while its average income of $87K is higher than the city’s $76K, its combined cost of housing and transportation is lower, at 37% of income versus 54% citywide.
And although Downtown has had significant growth in market-rate housing, it has also maintained and built more affordable housing than anywhere else, with 12,290 current units, 945 under construction and 3,239 more proposed.
In addition to the traditional economic statistics and demographic data, the DTLA 2022 report paints a vivid picture of the diverse and vibrant community of Downtowners, Griffin said, most of whom remain incredibly passionate about their neighborhood despite the pandemic, with 78% saying they “love downtown” and 70% that “they feel they are part of the DTLA community.”
“One of the things that became more evident during the pandemic is just how important the residential community has become to DTLA,” Griffin said. “Once a small band of pioneering urbanites, the Downtown population is now well over 80,000 strong. They are passionate about and committed to their neighborhood, and they really carried us through this challenging time.”
The report also provides sophisticated location and visitation data from Placer.ai, which shows that after a dramatic plunge at the onset of Covid, the number of visitors to DTLA has steadily climbed back to within reach of its pre-pandemic levels of 10 million visits per month. The data illustrates just how central Downtown remains to the region’s economy in terms of employment and tourism.
“We take pride in our role as the leading source of news and information about Downtown, and over the last two years that news has not always been good, so it’s gratifying to now be able to report that DTLA is once again on the rise.”
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