DTLA-Adjacent Nabes Poised for Growth

LOS ANGELES—M West Holdings has purchased the historic Wilshire Royale from a private and unnamed investor for $32.5 million. The multifamily property was originally built in the 1920s and is located in the Downtown Los Angeles-adjacent submarket Westlake District, which has seen an uptick in investment recently because of its proximity to the booming downtown market.

Institutional Property Advisors, a division of Marcus & Millichap, EVP of investments Greg Harris, along with directors Kevin Green and Joseph Grabiec, represented the seller and the buyer in the transaction. Marcus & Millichap Capital Corp.'s capital markets VPs Anita Paryani and Jake Roberts also secured debt on behalf of the buyer for the purchase. The brokers did not responded to several requests for a comment; however, Javier Rivera, a VP at JLL and a market expert unrelated to the deal tells GlobeSt.com, "There are a lot of neighborhoods between Hancock Park and Downtown Los Angeles—Westlake, Koreatown, Echo Park, Silverlake—and all of those neighborhoods are experiencing an uptick in demand on the multifamily front. In Westlake, the demand for apartments is through the roof. It is one of the densest neighborhoods in the United States, and I think that the urban nature of that neighborhood is in high demand by both traditional renters and new renters.”

Located at 2619 Wilshire Blvd. in Westlake, the 12-story property has 193 units as well as 9,269-square-feet of ground floor retail space. This submarket has become a hotbed for investment because Downtown Los Angeles is moving westward. The property is also located within close proximity to the Metro Red Line and Purple Line. M West plans to renovate the units and property to capitalize off of the growing demand in the area for quality living.

“The Royale is an iconic building and it is a treasure. It is definitely ripe for redevelopment,” says Rivera, adding that it isn't only iconic properties that are drawing investor interest. “On other levels, less iconic properties that are older have always drawn investors to this part of Los Angeles. Now that Koreatown, Echo Park and Silverlake are being priced up, I think value-add investors are moving closer to downtown along Wilshire and into Westlake.”

While Westlake is starting to see more investment action, Koreatown has been a value-add darling for the past year. The Laramar Group recently purchased a 32-unit property in the submarket, and in June, George Smith Partners helped three developers secure construction loans for the development of apartments and condos in the submarket.