The Downtown Los Angeles economy, long reliant upon its substantial office market, is showing signs of recovery due in large part to its growing and passionate residential population, according to the Downtown Center Business Improvement District’s (DCBID) 2021 Q2 Downtown LA Market Report.
In the absence of the area’s office workers and visitors, DTLA’s permanent residents, estimated at more than 80,000, stayed committed to the neighborhood in support of their local merchants.
According to the report, the DTLA residential occupancy rate is up 4.6% from the year ago quarter and at 89.5% has already surpassed pre-pandemic levels. Residential rental rates continued their climb and are up 1.3% to $3.14 per square foot.
The population continues to attract leading businesses and retailers, the most recent evidence of which was the second-quarter opening of the new Apple Store in the historic and restored Tower Theater.
The extraordinary resilience of the residential market has provided DTLA’s other markets increased confidence and additional time to find their footing. In addition to the opening of Apple Tower Theater, the retail market saw second-quarter arrivals of Chicago’s Girl & the Goat restaurant and second DTLA locations for Shake Shack and Zankou Chicken.
The Apple Tower Theater also brought the company’s new Today at Apple Creative Studios, a global initiative that provides hands-on experience and mentorship to young and often underrepresented creatives.
Having been hit especially hard by the pandemic, the DTLA office and hospitality markets are beginning to show signs of recovery. The office market, despite a growing vacancy rate, experienced increased activity highlighted by Skadden’s lease renewal for 120,000 square feet at One Cal Plaza on Bunker Hill and SteelWave’s $80 million acquisition of The Switchyard creative office campus in the Arts District. And after 16 months of travel restrictions and social distancing mandates, DTLA’s hospitality market showed sustained signs of recovery, with a year-to-date RevPAR up to $55.20, up 35% from the year-ago quarter and the third straight quarter of growth.
“While the report highlights real positive trends, there is still much to be regained, especially in the face of rising Delta variant cases,” said Suzanne Holley, president and CEO of the DCBID.
“But DTLA has proven to be a very resilient market, weathering several economic cycles including the Great Recession. Our residents, retailers and workers have a passion for DTLA that we feel is unique and will benefit the area’s recovery.”
Nick Griffith, DCBID executive director, added, “While our modest gains continue to build confidence in a sustained recovery, it is the enduring commitment that investors are showing that really demonstrates the drawing power and economic viability of DTLA. One look across the Downtown skyline and transformative projects can be found in every district.”