Why South Park Became DTLA's Hottest Market

LOS ANGELES—The Downtown market is on fire, but much of the development activity is centered in the South Park neighborhood. A new report from JLL looks into the activity in this neighborhood, and why it was the hot spot for growth in this once downtrodden market. Today, the market is an “entertainment powerhouse,” according to the report with both mid- and high-rise luxury development dominating the market.

“The turning point for the market came with the opening of Staples Center in 1999, paving the way for market's dramatic transformation,” Gary Horwitz, managing director at JLL, tells GlobeSt.com. “Beginning in 2000, a flurry of luxury high-rise apartment, condominium and hotel projects broke ground in South Park, fueled by a growing trend of urban living as well as robust hotel and convention activity. Today, the market is highly walkable and transit oriented offering an abundant choice of restaurants and nightlife options. No wonder millennials are drawn to the market.  Professionals enjoy the close proximity to their work. The area continues to experience unparalleled levels of investment in large-scale hotel and multifamily projects.”

While entertainment and residential have dominated the development in the market, there has been very little office construction. For residential, there is soaring demand for product, which has kept rents well above average for both the submarket and greater Los Angeles. “Rents have increased as new development in the area continues to grow,” says Horwitz. “South Park multifamily rents are 27 percent high than the average for Los Angeles.”

As a result of this demand and activity, the neighborhood is growing faster than any other neighborhood in the L.A. market. “The submarket now accounts for nearly two-thirds of Downtown's residential construction. South Park has also become a regional entertainment center with the presence of the Staples Center and LA Live,” explains Horwitz. “The market has a notable concentration of hotels to meet the growing demands of the Los Angeles Convention Center. The market is walkable with good public transportation making the area accessible for students and young professionals.”

There is no slowdown in site, either Horwitz says that despite the extreme activity, the market still has room for growth. “Currently, 6,500 people live in the area and the number is expected to triple over the next three years,” he adds. “Domestic and international developers have broken ground on a number of high-rise hotels, condos and apartments and more are proposed. Currently 4,500 residential units are under construction while an additional 6,000 residential units are in the entitlement stage. Expansion of the convention center will provide an economic boots local retailers. The number of hotel rooms is expected to increase significantly by 2020. Three of the venues for the Olympic 2024 bid could potentially be located in the South Park, further bolstering South Park's future.”

LOS ANGELES—The Downtown market is on fire, but much of the development activity is centered in the South Park neighborhood. A new report from JLL looks into the activity in this neighborhood, and why it was the hot spot for growth in this once downtrodden market. Today, the market is an “entertainment powerhouse,” according to the report with both mid- and high-rise luxury development dominating the market.

“The turning point for the market came with the opening of Staples Center in 1999, paving the way for market's dramatic transformation,” Gary Horwitz, managing director at JLL, tells GlobeSt.com. “Beginning in 2000, a flurry of luxury high-rise apartment, condominium and hotel projects broke ground in South Park, fueled by a growing trend of urban living as well as robust hotel and convention activity. Today, the market is highly walkable and transit oriented offering an abundant choice of restaurants and nightlife options. No wonder millennials are drawn to the market.  Professionals enjoy the close proximity to their work. The area continues to experience unparalleled levels of investment in large-scale hotel and multifamily projects.”

While entertainment and residential have dominated the development in the market, there has been very little office construction. For residential, there is soaring demand for product, which has kept rents well above average for both the submarket and greater Los Angeles. “Rents have increased as new development in the area continues to grow,” says Horwitz. “South Park multifamily rents are 27 percent high than the average for Los Angeles.”

As a result of this demand and activity, the neighborhood is growing faster than any other neighborhood in the L.A. market. “The submarket now accounts for nearly two-thirds of Downtown's residential construction. South Park has also become a regional entertainment center with the presence of the Staples Center and LA Live,” explains Horwitz. “The market has a notable concentration of hotels to meet the growing demands of the Los Angeles Convention Center. The market is walkable with good public transportation making the area accessible for students and young professionals.”

There is no slowdown in site, either Horwitz says that despite the extreme activity, the market still has room for growth. “Currently, 6,500 people live in the area and the number is expected to triple over the next three years,” he adds. “Domestic and international developers have broken ground on a number of high-rise hotels, condos and apartments and more are proposed. Currently 4,500 residential units are under construction while an additional 6,000 residential units are in the entitlement stage. Expansion of the convention center will provide an economic boots local retailers. The number of hotel rooms is expected to increase significantly by 2020. Three of the venues for the Olympic 2024 bid could potentially be located in the South Park, further bolstering South Park's future.”