Millennials Want Luxury in Koreatown

Steve Fifield: “Koreatown is a preferred submarket in its own right.”

LOS ANGELES—Koreatown is no longer riding the coattails of the Downtown renaissance. According to Steve Fifield , co-founder and principal of Century West Partners , the submarket is becoming a preferred market in its own right with all of the makings of a live/work/play community and great access to public transit. More and more developers are entering the market to meet the growing demand for luxury housing, according to the developer who recently brought his own luxury complex K2LA to the market. To find out what is driving this demand and where the market is headed, we sat down with Fifield for an exclusive interview. GlobeSt.com: Demand has been picking up in Koreatown for the past couple of years. Give me a snap shot of the market today. Steve Fifield: Our three-building K2LA development has tapped into a pent up demand for luxury residential apartments in Koreatown. With more than 125,000 residents, per 2008 census, K Town has always been one of the densest housing sub-markets in Los Angeles with 46,000 residents per square mile. However, much of the housing stock is dated (1920′s to 1970′s) with little or no amenities. Developers are just starting to fill the demands of the current population and those who want to move to Koreatown for urban, transit-oriented, highly amenitized and luxury rental apartments. GlobeSt.com: What is driving demand in this market? Fifield: Job growth and the millennial demographic are both driving demand throughout the region. Residents are choosing to live at K2LA because of its close proximity to public transportation combined with the superior amenities in our buildings. K2LA is two blocks from the Metro Red Line subway with just a 15 minute commute to the downtown financial district so many of our residents can leave their car at home during the day. And when they are not working, residents enjoy public amenities that include multiple fitness centers, two pool/spa decks as well as party and Wi-Fi rooms. Also, each building includes Century West Partner’s signature roof decks that include fire pits, exercise and yoga decks and over 20 individual grilling stations to accommodate both large and small groups. GlobeSt.com: How does Koreatown compare to other Downtown adjacent markets? Is there a similar uptick in activity in these markets? Why or why not? Fifield: Koreatown is a preferred submarket in its own right, due to the transportation, entertainment and cultural amenities, and is benefiting from many of the same demographic shifts, like job growth, the formation of households by millennials, a preference to rent vs. own, etc., that are driving an uptick elsewhere. In terms of rents, Century West Partners recently completed a similar scaled 440-unit, 3-building AVANT project in the very active South Park sub-market of DTLA and found that apartment rents are nearly identical between downtown and Koreatown. GlobeSt.com: What is driving your investment activity in this market? Fifield: Century West Partners was created to build transit-oriented, best-in-class apartments in urban infill submarkets in, and around, Los Angeles. Koreatown, and the unique demands of the Koreatown resident, mesh perfectly with that mission. Our unique urban communities give residents everything they need at their doorstep, whether it’s a state-of-the-art fitness center, pool, roof-deck, access to nightlife or walkability to a grocery store. GlobeSt.com: Who is the renter in Koreatown? What demographic are you building for, and how does this demographic compare to the people living in surrounding neighborhoods, like Hollywood, Silverlake and Downtown, especially considering the luxury development in Koreatown. Fifield: Ultimately, renter demands are similar across submarkets. They want a beautiful place to live, work and play with security and proactive staff creating a sense of community for the residents. And, that’s what we’re building. Koreatown’s population however is still very Korean – more so than the other areas you mentioned – and any community must cater to the unique characteristics of the target renter. However, K2LA is a wonderful home for anyone who wants to experience the best of urban living. GlobeSt.com: Where are rents in the market now, and where are they headed? Fifield: The entire Los Angeles metro area has seen rents increase fairly dramatically (5-7% per year) over the past several years. Koreatown is no different. We believe this trend will continue as the demographic tailwinds continue to drive rental demand and while Los Angeles continues to experience a housing shortage. GlobeSt.com: What are the challenges of developing in this market? Is competition an issue? Fifield: Koreatown is already a dense submarket and thus it’s difficult to build to any significant scale. At K2LA, we built three separate buildings totaling 478 residential units that can be operated with one manager and with shared leasing and marketing efforts to enhance the bottom line. The CWP strategy, which we have employed in other premium LA submarkets, has been to acquire and develop multiple adjacent synergistic projects.