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.
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.
With office 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 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.
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 Grupo Habita's proposed new Arts District property.
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 "beta-phase" launch of the Main Museum of Los Angeles.
Q3 Market Report Highlights:
- 16.9% Office Vacancy; 5.1% decrease YOY
- $3.32 PSF Class A Lease Rate; 8.5% increase YOY
- 1,665,418SF YTD Leasing Activity
- 4.0% Vacancy Rate: 24.5% decrease YOY
- $2.51 PSF Lease Rate; 4.2% decrease YOY
- 80% YTD Occupancy Rate; 4.7% increase YOY
- $213.24 YTD Average Daily Rate; 8.9% increase YOY
- $172.32 YTD Average RevPAR; 14% increase YOY
- 91.5% Occupancy rate for Apartments; 3.4% decrease YOY
- $2.81 PSF Average for Apartments; 4.5% increase YOY
- $2,584 Average Effective Rent per Unit: 4.1% increase YOY