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\n Bisnow\/Stephanie Smith\n <\/p>\n
\n Weaver\u2019s Alex Hill, G.H. Palmer Associates\u2019 Darrel Malamut, HACLA\u2019s Jenny Scanlin, AvalonBay\u2019s Mark Janda and Luxe Living Group\u2019s Media Moussavy\n <\/p>\n
Renters have the upper hand in Downtown Los Angeles, with sluggish apartment rent growth motivating landlords to offer concessions and even lower rents.\u00a0<\/p>\n
Rents fell 1.2% in Downtown in the first three months of this year, according to\u00a0a Colliers report<\/a>.<\/p>\n \u201cWe’ve had to lower our rents and sort of chase the market down to fill up our buildings,\u201d G.H. Palmer Associates Senior Vice President\u00a0of Development Darrel Malamut<\/a> told attendees at Bisnow\u2019s Downtown Los Angeles CRE Summit at the Aon Center<\/a> in Downtown.\u00a0<\/p>\n There\u2019s a heavy use of concessions throughout the market, AvalonBay<\/a> Senior Vice President of Development Mark Janda<\/a> said.\u00a0He pointed to perceptions that the Downtown area is not safe and to persistent issues with street cleanliness as factors that make it hard to attract renters from other parts of the city, despite the neighborhood\u2019s amenities.\u00a0<\/p>\n \n Bisnow\/Stephanie Smith\n <\/p>\n \n DTLA Alliance\u2019s Nick Griffin, LA Metro\u2019s Lilly O\u2019Brien, AEG Worldwide\u2019s Andrew Simon, LA City Planning\u2019s Jane Choi and Downtown Los Angeles Neighborhood Council\u2019s Jens Midthun\n <\/p>\n Downtown\u2019s main attractions are all the things outside of a person\u2019s apartment, but if renters don\u2019t want to go outside, those amenities lose their luster,\u00a0Janda said.<\/p>\n \u201cIt’s not a real rosy picture,\u201d\u00a0he said.\u00a0<\/p>\n Downtown renters are budget-minded and have come to expect to find deals in the area, and many landlords are obliging to try to keep occupancy up. The neighborhood\u2019s occupancy was at 91.6% in Q1, below the citywide average of 93.9%, according to Colliers.<\/p>\n \u201cPeople are very cost-conscious right now, and I think you see that in the downtown market,\u201d Housing Authority of the City of Los Angeles Chief Strategic Development Officer Jenny Scanlin said. \u201cRenters are looking for incentives. Renters are now assuming that there will be discounts, and that’s new. Obviously, we haven’t seen that in quite a few years, but that is where we are at today.\u201d<\/p>\n Owners looking to buy in Downtown are also poised to benefit from the choppy market and occupancy challenges. Buying fairly new product in Downtown for less than it would cost to build that unit today is possible, and those deals are helping\u00a0Scanlin’s agency find opportunities to secure long-term affordable housing in the neighborhood,\u00a0she said. \u00a0<\/p>\n HACLA<\/a>\u00a0bought a 154-unit building<\/a>\u00a0late last year in Downtown for $51.3M, or about $330K per unit. The property\u00a0was completed in 2023.\u00a0<\/p>\n Projects that are under construction now and have a construction loan coming due are looking to sell rather than try to finish the project and work to get the building occupied, Scanlin said.<\/p>\n \n Bisnow\/Stephanie Smith\n <\/p>\n \n Allen Matkins\u2019 Joe Dzida, Hal Bastian Inc.’s Hal Bastian, Ennead Architects\u2019 Michael Saltzman, Colliers\u2019 Adam Tischer, KWP Real Estate\u2019s Justin Weiss, GSA\u2019s Louie Silva and LBA Properties\u2019 Joe Suzuki\n <\/p>\n \u201cAnything that is under construction, or that\u2019s got cranes going, we assume is probably going to hit the market, and it probably will get purchased,\u201d Scanlin said.\u00a0<\/p>\n She\u00a0had less optimism about projects with entitlements but that had not yet begun construction.\u00a0<\/p>\n \u201cI don’t think anyone is that interested in right now, unless you’ve got really patient capital to sit and hold that property for a few years,\u201d Scanlin said. \u201cThat’s just not going to trade.\u201d<\/p>\n A thread running through the challenges to Downtown was the loss of foot traffic from office workers. Downtown, at its height, was reportedly host to an influx of 500,000 people during the workday, and those workers supported businesses, filled the streets at lunch time, and packed bars and restaurants for happy hours and dinners. Their adoption of hybrid or remote work has had a lasting impact.\u00a0<\/p>\n One glimmer of hope has been the return of government workers to the Downtown area. There are\u00a0an estimated 10,000 federal workers<\/a>\u00a0in various stages of coming back to work, said Louie Silva, a federal leasing capital project manager with the General Services Administration.\u00a0<\/p>\n Silva pointed to\u00a0a new 74K SF lease<\/a>\u00a0the Federal Public Defenders office took in the former Los Angeles Times building now owned by Onni. With the federal government\u00a0looking to sell<\/a>\u00a0some of the\u00a0older buildings it owns<\/a>\u00a0locally, agencies will need to relocate\u00a0to privately owned space, and Downtown is well-situated to\u00a0capitalize on those space needs, Silva said. A wave of new lease requirements is in the works now.\u00a0<\/p>\n \u201cYou haven’t seen it this second, but it is coming within four to six months,\u201d\u00a0he said. \u201cThese agencies need to go somewhere before they sell these buildings because they’re trying to get rid of them as quickly as they can.\u201d\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Bisnow\/Stephanie Smith Weaver\u2019s Alex Hill, G.H. Palmer Associates\u2019 Darrel Malamut, HACLA\u2019s Jenny Scanlin, AvalonBay\u2019s Mark Janda and Luxe…\n","protected":false},"author":3,"featured_media":776133,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5123],"tags":[318021,1582,276,318024,318025,103636,318026,2961,224,5337,318027,318023,318022],"class_list":{"0":"post-776132","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-los-angeles","8":"tag-avalonbay-communities","9":"tag-ca","10":"tag-california","11":"tag-darrel-malamut","12":"tag-g-h-palmer-associates","13":"tag-hacla","14":"tag-jenny-scanlin","15":"tag-la","16":"tag-los-angeles","17":"tag-losangeles","18":"tag-louie-silva","19":"tag-mark-janda","20":"tag-us-general-services-administration"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116524942040064317","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/776132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=776132"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/776132\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/776133"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=776132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=776132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=776132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/p>\n<\/p>\n