More Than 2,000 Apartment Units Hit DTLA Market

In the fourth quarter, the near record number of apartment units delivered in Downtown Los Angeles.

 

Original Article Credit:  Kelsi Maree Borland For Globe St.com

In the fourth quarter, a near record number of apartment units delivered in Downtown Los Angeles. For only the second time in the market’s history, more than 2,000 units hit the market in a single quarter, according to research from the DCBID. Four properties—a total of 2,011 units—came onto the market, second only to the third quarter 2018, when 2,027 units came to the market.

“It is affirming. It is the second highest number of units that have ever delivered in a quarter, and all of the properties are impressive properties,” Nick Griffin, executive director at the DCBID, tells GlobeSt.com. “It feels very impressive to have this quality of properties coming online at the same time, and it is also a continuation of the strength of the market.” The four properties include Park Fifth with 347 units; Trademark with 313 units, THEA at Metropolis with 685 units and Hope + Flower with 666 units.

 

The flood of deliveries will likely mean a temporary dip in apartment occupancy, but Griffin says that the impact is a mere side effect. “You cannot deliver that number of units all at once and not have occupancy rate dip,” he explains. “But, the really relevant stat to us is that if you only go back one quarter, meaning everything that has opened prior to quarter four, the vacancy rate is 91.6%. If you look at mature properties, which we define as being open for one year, the occupancy rate is at 95%. That is what we really base our judgment on. We feel pretty good about the market’s ability to absorb these new units.”

The developers are actually exceeding their leasing timetables, even with the completion from other properties. “I have pretty good communication with most of these developers, and they are very pleased with the activity so far,” says Griffin. “Most of the properties that have delivered in the last year have leased up faster than the game plan. Generally speaking, there is a good bit of confidence going forward.”

The growing construction pipeline is yet another sign of the market stability. While more than 2,000 units delivered in the fourth quarter, another 2,500 broke ground, including Fig at 7th and The Grand on Bunker Hill. “The number of new projects that started construction in the last quarter is another really good indicator of the continued strength,” says Griffin. “There is a lot of confidence in the Downtown market. Clearly the investment and development community sees continued strength in the market. That is the important thing to see.”

 

Original Article Credit:  Kelsi Maree Borland For Globe St.com