Downtown LA continued on its dynamic growth trajectory in Q3, despite a relatively slow quarter for the greater LA area. Leading the way was residential with another 1,380 rental units coming to market.
With 5 new projects opening in Q3 alone, 2017 has already set a new record with over 2,700 new units delivered this year. Nevertheless, demand kept pace, with rents and occupancy rates holding steady from quarter to quarter.
In the Financial District, the Wilshire Grand Center added Metrolink to its roster of tenants, bringing the property to 40% leased. Meanwhile, the creative migration to Downtown continued with Adidas announcing a new marketing headquarters, tech firm Gimbal relocating from Santa Monica, both to ROW DTLA, Bullitt Studios moving from West Hollywood to City Market South in the Fashion District, and architecture firm Jerde leaving Venice for the historic CalEdison on Bunker Hill.
The quarter was also highlighted by the opening of two flagship fashion boutiques: Nordstrom Rack at FigAt7th, and COS in the historic Olympic Theater off Broadway. Broadway also prepared to welcome another national footwear chain with news that Vans signed a full floor lease at the Singer Sewing Building. On the food front, Sweetgreen, the national chain of healthy fast-casual restaurants opened the first of several planned Downtown locations at The CalEdison.
Construction began on The Hoxton Hotel at 11th and Broadway across from the almost completed LA Proper. In the Arts District, construction also began on Soho House, a private social club for creatives, with 48 hotel rooms and a range of high-end amenities that will be located just a block from the new headquarters of Warner Music Group. Meanwhile the highly anticipated Nomad Hotel at 7th and Olive readied for a Q1 2018 opening.
CIVIC & CULTURAL
After several years sitting idle, Downtown's cherished Angel's Flight finally returned to full service, bringing an appealing tourist attraction and much-needed transport from the office towers of Bunker Hill to the dining and entertainment options in the Historic Core..
Q2 Market Report Highlights:
• 17.6% Office Vacancy; 4.8% decrease YOY
• $3.48 PSF Class-A Lease Rate; 4.8% increase YOY
• 1,946,024 SF YTD Leasing Activity; 17% increase YOY
• New Office Tenants Include Jerde Partnership, Bullitt Studios, and Gimbal
• 4.6% Retail Vacancy; 15% increase YOY
• $2.57 PSF Lease Rate; 2.4% increase YOY
• Q3 Retail Openings include COS, Nordstrom Rack, and Sweetgreen
• 81.1% YTD Occupancy Rate; .4% increase YOY
• $217.57 YTD Average Daily Rate; 2.0% increase YOY
• $176.38 YTD Average RevPAR; 2.4% increase YOY
• 1380 Rental Units Delivered in Q3; Sets new annual record at 2,700 units
• 87.50% Occupancy rate for Apartments; 4.4% decrease YOY
• $2.92 PSF Average for Apartments; 3.9% increase YOY