Is DTLA Passing Its “Prove It” Years?

Downtown Los Angeles is surviving its prove-it years. With several apartment projects delivering, 2017 and 2018 have been considered “prove it” years for the market. Despite the surge of new supply, the market continues to show strong multifamily absorption and rental rate growth, and in the first quarter of the year, occupancy increased nearly 5%, according to the latest report from the DCBID.

“This year and last have been considered ‘prove it’ years for the DTLA multifamily industry because of the record number of apartments and condos that were set to deliver in such a short timespan—especially in 2017—during which there was a record 2,831,” Carol Schatz, president and CEO of the DCBID, tells GlobeSt.com. “These residential deliveries come after having already delivered and filled more than 8,700 units over the prior five years – an average of approximately 1,750 per year. There were those in the industry who questioned the depth of demand and its ability to keep pace. But with occupancy levels once again nearing 93%, DTLA has more than answered the question.”

The market’s strong performance during these years illustrates its strength and momentum. While Schatz says hesitated to make any future predictions, she says that the activity has far exceeded expectations. “While the numbers in the market report answer that question definitively, we’ve long since abandoned trying to set expectations or predict what can be achieved,” she says. “The renaissance has far exceeded our wildest hopes and dreams, and if you poll the developers themselves, you will find that DTLA’s performance has exceeded even their expectations. That’s saying something.”