LOS ANGELES | Central City Project Rundown 5.0

[ConstructDTLA]

Originally Posted by DistrictDirt

How much vacancy do those buildings have? And are they condos or apartments?

All rentals.

The condo market has been very hot, which is why I don't think its fair to compare Barker Block condos to —-box 7-story rental buildings.

[DistrictDirt]

Originally Posted by DTLAdenizen

All rentals.

The condo market has been very hot, which is why I don't think its fair to compare Barker Block condos to —-box 7-story rental buildings.

So being that these buildings are apartments and have vacancies while the condo market is so hot that there's hardly any supply, isn't the problem just a misallocation of housing type? If the buildings you mentioned were condos, they'd be taken.

[ConstructDTLA]

Originally Posted by DistrictDirt

So being that these buildings are apartments and have vacancies while the condo market is so hot that there's hardly any supply, isn't the problem just a misallocation of housing type? If the buildings you mentioned were condos, they'd be taken.

Yes indeed.

[SoCalKid]

Originally Posted by DTLAdenizen

A simple, non-rhetorical question for you:

If there is a significant housing shortage with a large amount of people 'waiting for these units to come online', then why is there so much vacancy in Apex, Watermarke, 717? These new buildings will be at the same price points, and will unfortunately have just as much vacancy. At least until DTLA becomes decent (2017 onward).

Watermarke is 98% occupied. 717 is above 95%. Apex is close to 95%. 95% is considered "full occupancy" when underwriting a development. I don't have a problem with any on your opinions, but please don't say things that are factually incorrect. It's misleading.

[LosAngelesSportsFan]

Originally Posted by SoCalKid

Watermarke is 98% occupied. 717 is above 95%. Apex is close to 95%. 95% is considered "full occupancy" when underwriting a development. I don't have a problem with any on your opinions, but please don't say things that are factually incorrect. It's misleading.

Yup, this is true. Watermarke and 717 have been pretty much full since they opened. Apex had some vacancies, however, management there is horrible from what ive heard and they had some underwhelming units for their prices to say the least

[BrandonJXN]

The Watermarke and it's ugly parking podium were on America's Next Top Model. The models stayed in the penthouse.

....

What can I say I like the show.

[alki]

Originally Posted by DistrictDirt

So being that these buildings are apartments and have vacancies while the condo market is so hot that there's hardly any supply, isn't the problem just a misallocation of housing type? If the buildings you mentioned were condos, they'd be taken.

First of all, the condo market is not that strong. The overhang from 2008 was just getting sold this past year. If the market were stronger, we would be seeing more new condo bldgs going up and more conversions from rental to condo.

As for the rental market, I think its solid but I don't know how strong it is. If Apex is at 95%, that's up from 85% at the end of last year. That doesn't really tell us how strong it really is.......I would love to know how the new projects are renting up. That would be the tell.

As for rents, I was one of the people that thought they were high on a per sq footage basis. I still don't know whether its because of construction costs, or plain ole taking advantage of market demand.

Some background:

In many but not all cities, the rental market has been strong esp that portion of the market catering to Millennials. A common complaint generally has been that developers are not building more moderate priced units let alone affordable units. Its believed the high priced rental market is strong because Millennials can't afford to buy yet.

In the stronger markets like SF and NYC, the first new condos bldgs were announced two-three years ago; cities like MPLS and Austin in the last year. I think LA has one condo project proposed......I don't remember if its under construction yet or not. Banks and developers are still cautious when it comes to condos.

I think people have to remember that DTLA is doing remarkably well given where its been and given how LA's employment has been lackluster until this past year. Just a little over a year ago I thought DT retail would not reach the point where it is today for another 5 years. Most cities would kill to be DTLA today. Is it perfect? Not by a long shot but the changes are major and its exciting to watch them unfold.

[citywatch]

I wonder how much of a profit margin the devlprs of the various new apt projs in dt are getting or expect? It is average, or is it on the high or low side?

I know it wasn't considered profitable enough to build new housing in dt not too many yrs ago & certainly back in the Dark ages, when the hood was considered the last place any one in LA wanted to call home.

The devlpr of one of the highrise apt towers completed during the 1990s on bunker hill had rights to add another tower but he chose to never go ahead with that option. He presumably didn't think the effort would be worth his time & money. only now is that space being filled in with the apt tower right next to the broad museum.

btw, the jia apt proj in chinatown appears to be 50% leased, which seems to be moving at a fairly good pace. however, I recall hearing about new apt projs in NYC being fully booked on opening day. But although a similar situation in dtla would bring great joy to devlprs here, that type of popularity would risk making apt rental rates in LA even more beyond the reach of many ppl.

So I have mixed emotions about new apt bldgs in dtla renting up ASAP. So while high profitability would encourage devlprs to break ground more quickly & with greater confidence, an overly fast booking rate also may stress out the budgets of many ppl in LA, eventually destroying the appeal of dtLA to both new residents & travelers.

In the meantime, here's an insider peek preview shot of the main gallery in the broad museum......



twitter.com/pietromarx

[ConstructDTLA]

Originally Posted by SoCalKid

Watermarke is 98% occupied. 717 is above 95%. Apex is close to 95%. 95% is considered "full occupancy" when underwriting a development. I don't have a problem with any on your opinions, but please don't say things that are factually incorrect. It's misleading.

Please post the source when citing specific percentages like that.

[bobcat]

Maybe SoCalKid has more recent data but from the Dec '13 DTLA BID housing survey the occupancy rates and asking rents for those buildings were as follows:

717 Olympic 97% ($3.50/sf)
Water Marke 93% ($4.11/sf)
Apex 82% (($3.23/sf)

http://www.downtownla.com/pdfs/econ_developments/Market-Report-2013-Q4.pdf?v=1

Wow, Water Marke is expensive! Odd that Apex had the lowest occupancy yet also had the lowest rents.

Edit: Apex and 717 both have availability listed on their websites. I counted 28 units available at Apex and 10 units at 717. That would put their occupancies at 89.7% and 93.4% respectively.

[BrandonJXN]

Originally Posted by DTLAdenizen

Please post the source when citing specific percentages like that.

I love it. Giving false information (without a source) then asking for a source when the correct information is given. Outstanding.

Anyways, how is the Hall of Justice rehab coming along? Been a while since we had an update on that.

[alki]

Originally Posted by bobcat

Maybe SoCalKid has more recent data but from the Dec '13 DTLA BID housing survey the occupancy rates and asking rents for those buildings were as follows:

717 Olympic 97% ($3.50/sf)
Water Marke 93% ($4.11/sf)
Apex 82% (($3.23/sf)

http://www.downtownla.com/pdfs/econ_developments/Market-Report-2013-Q4.pdf?v=1

Wow, Water Marke is expensive! Odd that Apex had the lowest occupancy yet also had the lowest rents.

Edit: Apex and 717 both have availability listed on their websites. I counted 28 units available at Apex and 10 units at 717. That would put their occupancies at 89.7% and 93.4% respectively.

Looking at Apex, I think its a mistake to put too much stock in its occupancy rate because of its poor mgmt.....see the complaints on yelp:

http://www.yelp.com/biz/apex-the-one-los-angeles

When I saw the higher occupancy figure posted here, I figured mgmt had turned things around. Clearly, that may not be the case.

As for 717, their website now shows 8 units available. If true, and total units are 151, then occupancy is at 95% which is considered full.

I still think the key is how Ava and Avant are renting. They have rents comparable to 717 but do not provide the same level of amenities as 717.

[caligrad]

^^^ Yeah Apex is ridiculous, when my friend was looking to move downtown, he tried Apex first and management is laughable. I didn't believe the hassle he was going through but when I went on a tour with him one day, after the forced him to reschedule twice because they were busy, the staff were unprofessional at best, rude and acted like they didn't want to be bothered, that was a year ago though, probably things have changed by now. Hopefully.

Originally Posted by BrandonJXN

I love it. Giving false information (without a source) then asking for a source when the correct information is given. Outstanding.

Anyways, how is the Hall of Justice rehab coming along? Been a while since we had an update on that.

LOL gave me a good laugh this morning, I didn't want to be the first to mention it tho LOL. I drove past the hall of justice Monday, looking good. getting the TLC it so badly deserves. inside and out.

[brudy]

Originally Posted by alki

I still think the key is how Ava and Avant are renting. They have rents comparable to 717 but do not provide the same level of amenities as 717.

Probably too soon to tell, and both those buildings aren't nearly as impressive as 717 (and in the case of Ava just downright ugly). I also wonder how the JIA is doing? It's rents are slightly less than Ava, but still not cheap by any stretch (575 sq ft studio for $1770).

[BrandonJXN]

Originally Posted by brudy

Probably too soon to tell, and both those buildings aren't nearly as impressive as 717 (and in the case of Ava just downright ugly). I also wonder how the JIA is doing? It's rents are slightly less than Ava, but still not cheap by any stretch (575 sq ft studio for $1770).

I don't mind Ava's tangerine dream color scheme so much. At least not in Little Tokyo. It's a lively area that warrants color and such. The next step is to get rid of that Office Depot. That's a valuable piece of land.

[SoCalKid]

Originally Posted by DTLAdenizen

Please post the source when citing specific percentages like that.

The source is leasing consultants at the buildings. I track this info pretty constantly. I also cross reference what they say with the availability listed on the website to make sure they are telling the truth.

[SoCalKid]

Originally Posted by bobcat

Maybe SoCalKid has more recent data but from the Dec '13 DTLA BID housing survey the occupancy rates and asking rents for those buildings were as follows:

717 Olympic 97% ($3.50/sf)
Water Marke 93% ($4.11/sf)
Apex 82% (($3.23/sf)

http://www.downtownla.com/pdfs/econ_developments/Market-Report-2013-Q4.pdf?v=1

Wow, Water Marke is expensive! Odd that Apex had the lowest occupancy yet also had the lowest rents.

Edit: Apex and 717 both have availability listed on their websites. I counted 28 units available at Apex and 10 units at 717. That would put their occupancies at 89.7% and 93.4% respectively.

You're right, there's been quite an improvement since the Dec 2013 survey. When you're checking the availability on the website, it's important to actually click when it says "x units available". Often it will say for example "3 units available" but when you click and look you see two of them aren't available until late August and are therefore actually filled at the moment. It's not fair to count them as vacant, as many will be filled by the time they are actually vacated.

Anyway, we should get back on track to development. Sorry if I took us on a tangent, I just thought I should correct false information since I had the right numbers available.

[LA/OCman]

If you look at this public web page, the amount of options for most buildings Downtown are few. You can look up the building and see what is available for lease in DTLA.

http://www.theloftexchange.com

Also, I have owned 4 loft units I have been renting out beginning in 2008. I have never had a vacancy longer than 2 weeks…and that was during the height of the economic turndown. Rental units also open up this time of year….and still there are is not a lot of rental inventory. My sister just rented out a furnished loft in South Park (1000 sq ft) for $3,000. She had 3 people wanting to rent it on the first day. A few years ago I rented out one of my units in the Eastern Columbia and had 3 people look at it in one day and all 3 wanted to rent it.

I will say that I have lived in two loft buildings DT and having a pool is really a selling point. This is California and DTLA can offer year round pool access. You won't find that in Seattle, Chicago or many buildings in NYC.

Also, I don't understand the 7 story phenomenon. Taller buildings with views will command nice rental income. I also have great hopes for the historic buildings on Broadway and Hill Streets. Let's hope the developers will offer decent floor plans with reasonable rents. Perhaps we will see condos again in the Historic Core….I hope so. There is a market here.

[blackcat23]

http://www.bloomberg.com/news/2014-06-11...-as-towers-rise-from-boston-to-l-a-.html

That hasn’t been a deterrent in high-cost markets with limited housing stock, where cash-bearing buyers often win in bidding wars. Trumark Cos., based in Danville, California, began developing condos in San Francisco in 2011 and now has eight projects worth more than $500 million in the city, said Arden Hearing, managing director of TrumarkUrban, the company’s condo unit.

Trumark’s first Los Angeles project, a 22-floor tower with 151 units at the intersection of Grand Avenue and 11th Street, is expected to break ground in the fourth quarter on a site where a condo development stalled during the recession, he said. Trumark expects to start a second project five blocks away in 2016 in a neighborhood already bristling with hotel and apartment construction cranes.

Downtown “L.A. is all of a sudden a hot, burgeoning urban market,” Hearing said. “Half a million jobs and 50,000 residents, and no new condos.”

This meshes with the photo from WonderlandPark a few weeks back, which showed soil testing underway at 1050 S. Grand Avenue.

[BrandonJXN]

Did I read that correctly? The Glass Tower, which hasn't made a peep in about 6 years is expected to break ground later this year?