7 Reasons To Invest In Downtown LA Multifamily Now
Downtown LA is one of Southern California’s most recently transformed and rapidly evolving submarkets. We caught up with Polaris Pacific Director of Business Development Rhonda Slavik, who has witnessed the revitalization of DTLA and its effect on multifamily, to learn about the top seven reasons to invest in DTLA.
Prices are up 4% year-over-year, and many expect valuation increases to accelerate in coming years.
“The overarching trend, since development really took off in Downtown LA in 2004, is consistent upticks in the market, with the exception of early 2009 and 2010,” Slavik said.
She said in recent years, DTLA’s development explosion has made it Southern California’s top-performing submarket.
Although Slavik believes DTLA is already a drastically different place than it was five years ago, primarily due to the addition of new office, retail, restaurants and residential, it still has a long way to go.
“It will take another quantum leap in five years and that’s why it’s exciting to invest in downtown,” Slavik said. “To me it’s like an ecosystem. For example, the Free Hands hotel just opened, and when I walked in for the first time my jaw dropped. For me, it’s the filling in of downtown that’s creating this vibrant neighborhood.”
Slavik anticipates that projects on the outskirts of DTLA that rely on their proximity to the core area may struggle in the short term, but eventually become sound assets.
According to Slavik, with the public transit system's Metro, buses and Dash, ride-sharing services like Uber and Lyft and, in the near future, autonomous vehicles, many will find they do not need a car in downtown, even on the fringes. The number of two-car households is dwindling, which could alleviate congestion, for which LA is internationally infamous.
“Angelinos are separating from their cars, and in the next five years Downtown LA should be much less car-dependent,” Slavik said.
4. Limited Inventory
“There are fewer than 100 units that are move-in ready and only around 300 available for purchase,” Slavik said. “This is a small fraction, around a tenth, of the inventory in [the] last cycle, which had 3,500 units.”
5. The Neighborhood
One of residents’ favorite aspects of DTLA is its climate, and developers are capitalizing on this with more rooftop and outdoor lounges and green space.
“Summer nights on the rooftop at Perch or The Ace are incredible. Their rooftops are perfect for taking in the views,” Slavik said. “With everything at your fingertips, you don’t want to leave.”
6. Buying Power
Interest rates are still at historical lows, which affords investors a lot of buying power. Slavik advises people to take advantage of low rates to get a bigger home and more of what they want.
7. The Rams
The Rams’ returning is a huge win for LA, and a source of community-unifying pride. Their season starts Sept. 10, and in 2020, they will move into their new $2.6B Inglewood stadium to be shared with the Chargers.
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