Q3 2016 MARKET REPORT
EXECUTIVE SUMMARY
Downtown continued to build on its own momentum with growth in all sectors reinforcing confidence in the future . Twenty three new projects were proposed in this quarter alone , highlighted by SunCal ’ s 15-acre 6AM project , designed by Herzog & de Meuron , elevating Arts District development to a whole new strata .
RESIDENTIAL
The residential market demonstrated sustained strength with another quarter of rising rents . Developers opened four new projects with 886 units , broke ground on another 1,600 , and submitted proposals for over 6,000 more .
OFFICE
With vacancy rates down and rents up , there were several notable leases this quarter . But the biggest news was Warner Music Group ’ s 10-year deal for over 250,000 SF at The Ford Factory . The Onni Group also deepened their already strong commitment to DTLA with the purchase of The Los Angeles Times building and related properties for $ 105 million .
RETAIL
Retail vacancy is down sharply as well , with new businesses setting up shop in each of our unique neighborhoods . One Santa Fe in the Arts District added Bulletproof Coffee to its tenant mix . Perverse Sunglasses launched their flagship store in the Fashion District . And OUE ’ s US Bank Tower in the Financial District celebrated the opening of 71Above with breathtaking 360-degree views .
HOSPITALITY
Visitors continued to flock to DTLA , pushing RevPar up almost 14 % over last year and attracting a steady flow of new hospitality projects , such as high-end boutique operator Groupo Habita ’ s proposed new Arts District property .
CIVIC & CULTURAL
Keeping pace with the commercial sectors , construction was completed on Downtown ’ s newest civic jewel , the SOM-designed Federal Courthouse . Looking ahead , October will see start of construction on the MyFigueroa streetscape project and the “ betaphase ” launch of the Main Museum of Los Angeles .
Q3 KEY STATS
$ 3.32
Average Class A Rent Per Square Foot
16.8 % Office Vacancy Rate 185,142 Year-to-date office net absorption $ 172.32 Hotel RevPar
Q3 KEY HIGHLIGHTS
1,646
New residential units broke ground
$ 2.81
Apartment Asking Rent Per Square Foot
6,060
New residential units proposed
SunCal released plans for their 6AM project Onni Group purchased LA Times properties for $ 105m Warner Music Group announced move to The Ford Factory
INVESTMENT IN DOWNTOWN LA
Between 1999-2015
Commercial $ 1.2b
Civic & Institutional
Mixed-Use
Residential
Arts & Entertainment $ 1.5b
TOTAL : $ 24.4 billion
$ 4b
Figueroa Corridor / Expo Park $ 1.5b
$ 6.8b
$ 9.4b
4 Downtown Center Business Improvement District