Downtown L.A. Luxury Real Estate Market ‘In the Midst of a Boom’
The pandemic rocked downtown Los Angeles’ luxury residential real estate market. Because office towers were vacant and nightlife shut down, the allure of urban core living faded significantly. Throughout 2020 and into 2021, discounts and incentives were on offer for luxury rentals. Residential sales slowed. The highly visible project, and what was to be L.A.’s tallest residential tower at Oceanwide Plaza across from the Crypto.com Arena, completely stalled after halting construction in 2019.
Condominium development did continue apace, and several of those projects are now on the market, such as the 450-unit Perla on Broadway and the Metropolis Tower, with more in the pipeline. Residential towers are reshaping the skyline as vertical living gains traction from South Park to the historic core and across the Arts District. The coming launch of the 45-story the Grand by Gehry from architect Frank Gehry and Related is much anticipated because it will bring a signature residential tower to Grand Avenue, along with retail, restaurants and the 305-room Conrad Los Angeles hotel.
“People wrote downtown off but it is a very resilient community,” says real estate agent Media Moussavy of the Agency, who’s an expert on downtown residential leasing and sales. Per the multiple listing service (MLS), there’s been an uptick in residential sales (up 16% year-over-year), a 7% increase in median sales price and a 25% decrease in time on the market during the same time period. The average sales price in January was $620,000 (per Redfin) although compared to most of Southern California, downtown is a less competitive market and has relatively grounded home values.
Downtown home ownership opportunities have always been limited; Arts District lofts and historic core adaptive re-use buildings were the exception. The Perla on Broadway (at 400 S. Broadway) is one of the latest additions to downtown’s saleable inventory: the 35-story building from developers SCG America, the first to be built on downtown’s main artery in close to 100 years, offers studio, one- and two-bedroom layouts. Italian appliances, floor-to-ceiling windows, an indoor gaming lounge and an outdoor 36th floor rooftop glass-walled lounging area with unobstructed skyline views are a few of the lavish comforts. The sales process is underway and current listing prices start at $449,000.
Arts District lofts are always in demand. Director Justin Lin recently listed his multi-level, showplace penthouse at the landmark Biscuit Co. Lofts for $6 million. The live/work loft has a storied history: a classic adaptive re-use of a former industrial space. The Biscuit Co. Lofts were originally built in 1925 as the West Coast headquarters of Nabisco, designed by E.J. Eckel for the — at the time — huge sum of $2 million. Vincent Gallo is among the previous owners.
“It might not feel like it, but downtown Los Angeles is in the midst of a boom,” says Tab Howard of the Alexander Group at Compass. He contends downtown’s real estate is underutilized, particularly for commercial and manufacturing uses. However, the appeal to artists and creators seeking a true metropolitan experience is undeniable.
Lin’s two bedroom, 2½ bath, 4,300-sq.-ft. loft has dramatic cantilevered stairs and private wrap-around terrace. At 3,600 square-feet, the outdoor deck is larger than most homes.
“It is almost 100 years old and definitely has that exposed brick New York City/Soho vibe, which is hard to find in Los Angeles,” says Howard, who contends buyers “get more bang for their buck” in downtown L.A.
The majority of downtown Los Angeles’ estimated 85,000 residents are renters and by far under 40. The norm for young renters is to live downtown approximately three years or so; building hopping and chasing rental incentives is common. Gleaming luxury rental high rises are the attraction for those who can afford them (on average, a one-bedroom apartment downtown rents for more than $2,600/monthly).
Buildings promote their competitive set of amenities including expansive views, rooftop pools, high-style fitness centers, concierge services and pet perks. Amenities and security are the differentials in these elevated communities.
One rental flies above them all with every imaginable extra and highest end finishes: 825 Hill’s six-bedroom, 11-bath, 19,300-sq.-ft. penthouse, atop 52 floors. The palatial apartment holds the current record for priciest lease in the city at $95,000 per month for the first year. Compass’ Lee Mintz negotiated the deal on behalf of her client who sought a “wow” location. The penthouse features its own pool and elevator — and a rock-climbing wall. The building offers a level of security not possible at a single-family home.
“It doesn’t get more private. … I believe in the product,” says Mintz of downtown L.A.’s future possibilities.
Developers and city planners agree as new mixed-use, predominantly residential projects are coming to traditional commercial blocks. Etco Homes is behind Ato, an eight-story mixed-use building with 77 residences now under construction in historic Little Tokyo.
The condominiums will range from 700- to 1,117 square-feet topped by a rooftop lifestyle deck with pool (and views of City Hall), multiple gathering areas and an outdoor theater. The new Metro Little Tokyo station is close by. Sales will begin in April and move-ins expected by late 2022.
“The residential building boom in downtown Los Angeles has spurred a modern renaissance in Little Tokyo, attracting home buyers seeking an energetic urban environment in this historically Japanese neighborhood,” says Afshin Etebar, president of Etco Homes.
Although downtown has its grittier side, residents can count on vibrant street life, walkability and endless dining, cultural and entertainment options.
As the Agency’s Moussavy says, an investment in downtown living makes sense for those who can stay five to 10 years.
He notes, “The outlook is strong: If you put roots down here, and you are in it to stick it out for the long term, you won’t lose.”