Downtown Los Angeles is beginning to boom again. Development teams are resurrecting ambitious projects that have been on hold since the bust, kicking off a flurry of new construction—from cushy hotels to large apartment complexes—that is swiftly transforming the skyline.
“We’re feeling very optimistic,” said Beatrice Hsu of Related Companies. “There’s a lot of good activity.” Related just broke ground on a 19-story, 271-unit building designed by Arquitectonica of Miami. This marks the start of the first building in the long-stalled $3 billion, mixed-use Grand Avenue project adjacent to the soon-to-becompleted Broad Museum. “You can see the potential: The fundamentals are still there and some have improved, like more bars and restaurants,” Hsu added.
Related also recently completed work on Grand Park between the Music Center and City Hall. The company maintains that this green space should help set the stage for the rest of the Grand Avenue project, which Hsu insists is “still moving forward.” Said Hsu: “From the beginning we had to create that space first.”
Central City Association President Carol Schatz, whose organization advocates for LA businesses, told The Wall Street Journal 1,526 new apartments and condos are under construction downtown.While fresh condo development is rare, prices are rising and new rental buildings are springing up, along with several new hotels, offices, and retail spaces. Residential rental rates climbed 11.5 percent in Los Angeles in the second quarter of this year, according to The Mark Company’s On The Market report. At downtown Los Angeles hotels with nightly rates exceeding $110, the occupancy rate reached 73 percent in May, a spike from 66.5 percent a year earlier, according to the Los Angeles County Economic Development Corporation. (LAEDC).
“Construction pretty much came to a full stop during the recession, but the downtown area has seen a number of new projects get underway during the past three years,” noted Kimberly Ritter-Martinez, associate economist with the LAEDC.
Other downtown projects include developer Barry Shy’s 40-story, 350-unit Historic Core tower, dubbed SB Omega; the 14-story L.A. Hotel Downtown, an upgrade and modernization of a former Marriott; and the Ace Hotel chain’s transformation of an aged edifice into a 180-room hip hangout, encompassing a 1,600-seat historic theater that will reopen on Broadway. Also in the works are two 22-story buildings: Wood Partners’ 290-unit, all-glass luxury highrise, Eighth and Hope; and Equity Residential’s Chinatown Gateway, a 280-unit building with 20,000 square feet of retail space.
And the growth isn’t just taking place downtown. The development corporation is predicting a surge in housing construction across the county and expects authorities to grant 13,000 new housing permits this year and 16,240 the next, far more than last year’s 10,403.