DTLA Investment Will Grow for the Next Decade

LOS ANGELES—Downtown Los Angeles can expect investment growth for the next decade, according to Jeffrey Kanne, president and CEO of National Realty Advisors. National Real Estate Advisors is the Ratkovich Co.'s joint venture partner on the Bloc development. National Real Estate Advisors, however, began investing in the market in 2004 and 2005, and it believes that it has the fundamentals to continue to thrive.  

“I think there is going to be a lot of investment downtown for the next 10 to 15 years,” Kanne tells GlobeSt.com. “We invest in 25 different cities. L.A. had always been a mystery to us because of the tepid nature of downtown until very recently. We first started investing in downtown in 2004 and 2005 when we financed a few condominium projects in South Park, which was very successful. Then the housing bust came. We continued to look for opportunities because we believed that Los Angeles needed a heart. We decided to put as much money as we have into this project and into Downtown because the drivers were starting to appear.”

The Bloc development, as are many of the developments in downtown, is targeting urban spirits with a desire for walkable neighborhoods and unique retail, dining and entertainment options. “The millennials and baby boomers are sick of suburban life, and they want to be able to live and work and play in the same area,” says Kanne about the Bloc's target demographics. “There are a huge amount of people that want to live that way, and that will continue to want to live that way.”

The true catalyst for this investment, according to Kanne, is a combination of the Staples Center and L.A. LIVE developments and a public capital investment in the transportation infrastructure. “Without the Staples and L.A. LIVE investments, we never would have made our first investment in South Park,” says Kanne. “It was clear to us that enough money was coming through those investments, plus the transportation infrastructure, that were going pump some blood downtown in a way that it hasn't had forever.”

The downtown market is now seeing development in multifamily, retail, office and hotel product. The pipeline is strong, and the market is expanding past South Park. With Kanne's prediction that we will see another decade of investment growth, it seems like there is much more to come.