(To read more on the multifamily market, click here.)
LOS ANGELES-In a survey of Downtown residents and its business community that was released Feb. 20 by the Downtown Center Business Improvement District (DCBID), business establishments, total employment, taxable retail sales, office rents and new housing units are all on the rise. These escalations have been spurred, DCBID experts say, by Downtown's burgeoning population.
"This is phenomenally good news for Downtown Los Angeles and, therefore, for the region," Carol E. Schatz, president and CEO of the DCBID, tells GlobeSt.com. "Downtown is growing at a phenomenal pace."
Since 2004, Downtown L.A. has gained nearly 5,000 new residents, according to the study, which attributes this 20% growth in population to a desire to live in a thriving urban setting, the wide range of cultural activities available in Downtown and the geographic advantage that comes with living close to where one works and plays. The area's residential base of more than 28,000 – 30.2% of which were owners in 2006, compared to 18.6% in 2004 – combined with its workforce, gives Downtown a very high purchasing power and has resulted in taxable retail sales totaling nearly $1.7 billion in the 2005 to 2006 fiscal year, up 7% from the previous year.
"We knew that [if we focused on] housing first, retail would follow," Schatz notes. "We knew people would begin by renting, and, as they determined Downtown was a place they wanted to live, they would begin to buy."
Since the Adaptive Reuse Ordinance of 1999 passed, more than 7,000 new housing units have opened Downtown, with nearly 7,500 more under construction. Downtown's historically low office vacancy rate and steady job growth have poised office rents to continue rising through 2007, according to the study.
With the live and work aspects in place, Downtowners, whether by address or job, turned their spending toward retail, as did those from surrounding communities and out-of-towners.
"All retail here is doing very well," Schatz says. "It was kicked off by Staples Center, which gave people a reason to stay in Downtown…[and] with the burgeoning residential population and workers staying past work to avoid the commute, Downtown is quickly becoming a 24-hour town."
Downtown's renaissance is expected to continue with the Grand Avenue project, L.A. Live, the expansion of the Colburn School for the performing arts, the Gold Line light rail extension and the addition of the Exposition Boulevard light rail that will run from Downtown to Culver City.
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