A number of developers have set their sights on South Park, seeing significant profit potential in the neighborhood that includes Staples Center and L.A. Live. Few, however, have made as aggressive a play as Mack Real Estate Development.
In 2012, as Downtown was still recovering from the depths of the recession, the developer paid $80 million for six lots along Grand Avenue and Olive Street. It laid out a vision for a $1.2 billion master plan, with a total of five buildings rising in phases. The proposal included creating approximately 2,000 residential units.
Phase one came in 2017, when the 362-apartment Wren opened at 1230 S. Olive St. The seven-story project immediately boosted the housing stock in South Park, but the mid-rise design was similar to a number of other projects in the area at the time.
Phase two is grander in size and ambition. Move-ins at the 38-story Aven (created in partnership with AECOM Capital) began Jan. 2. The steel-and-glass high-rise with 536 market-rate apartments is currently 18% leased and 10% occupied, according to the property’s leasing director, Merci Lim.
Paul Keller, chairman of Mack Urban, said Wren has found its market, though the developer would not reveal the building’s occupancy level.
“When you think of the submarket west of the central business district, and you think about it in the context of affordability, the central business district continues to be a bargain,” Keller said. “Since we opened about seven weeks ago, we’re ahead of plan on the lease-up, as we were on Wren.”
Aven offers studio to two-bedroom apartments priced at approximately $4.50 per square foot, which puts it at the upper range of the Downtown rental spectrum. A two-bedroom unit on the 18th floor, with 1,110 square feet of space, goes for $5,150. A 690-square-foot one-bedroom on the ninth floor is $3,050.
Units have wood cabinets and flooring, tile backsplashes, gas ranges and washer and dryers. Nearly half of the residences offer balconies.
The building also has three penthouses on the 35th floor. One, which spans the entire western side of the tower with 2,930 square feet of space, gives an almost full panoramic view of Downtown and South Los Angeles. It rents for $19,588 per month.
Although Downtown is seeing a number of new projects, Stephen Basham, managing analyst for the real estate brokerage firm CoStar, said that Aven, along with the similarly priced and recently opened Circa, are not a “new normal” for Downtown.
“There’s still only a handful of properties Downtown asking north of $4 per square foot, and all of those are recently opened luxury high-rises,” Basham said.
Aven includes two furnished units that are designed for short-term stays. The idea with the one-bedroom on the 31st floor and a two-bedroom on the 18th is that people visiting Aven residents can have a place to stay on site, according to Lim.
As with many other Downtown apartment buildings, Aven is using incentives to lure tenants, including up to six weeks of free rent. That is comparable to what other new residential structures are offering, according to Alex LiMandri, a Downtown-based residential broker with DTLA Life.
Aven is being marketed to young professionals working in the Downtown central business district. LiMandri said that makes sense given the price point and trends of people who are relocating to Downtown.
While Mack Urban ultimately envisions more people with children setting up in Downtown, Keller said the demand is not there yet.
“We’re not seeing families in any numbers moving into Aven, and we didn’t intend for that to be occurring,” Keller said.
Aven sports an extensive amenities deck on the seventh floor. It has residential lounges, a large co-working space, as well as a gym that can be opened up for outdoor classes. A pool, basketball court and dog run take up the southern end of the deck. The building has 801 parking spaces and 589 bike stalls.
A second deck, on the 32nd floor, has a wide view of Los Angeles, as well as orange and lime trees.
LiMandri said that in the current Downtown market, potential tenants are seeking amenities beyond just a pool and a gym. He said the co-working space, which includes conference rooms, printing equipment, and private nooks to work in, is a particularly savvy move by the developer.
The project includes one unique feature: The 13,000-square-foot Aven Park on the north side of the structure has trees, gardens on the edges and a hardscaped walkway. Benches line the walkway, which connects to Margo Street, the road between Grand Avenue and Olive Street. The park is set to debut late this month and will be open to the public.
Keller said that given the size of Mack Urban’s investment in South Park, it made sense to add something that would benefit the wider community, and cited the lack of green space in the neighborhood. The development team hopes to bring a restaurant to a ground-floor commercial space that abuts the park, and create some outdoor patio space, he added.
Aven’s debut comes as the Downtown housing market is rapidly expanding. In the last several months, Holland Partner Group’s Grace and Griffin towers opened at Eighth and Spring streets, while the developer’s third project, Alina, came online on Ninth Street. The luxury twin-tower Circa complex began move-ins in the fall. The CIM Group’s 888 at Grand Hope Park added another 525 apartments to the area. The Onni Group is scheduled to open the 53-story 825 South Hill project in the coming weeks.
LiMandri said that many of the new arrivals offer similar features, so location could be a deciding factor for prospective tenants. He said that with the park and the siting, Aven offers a quieter experience than developments such as Circa, which is across the street from Staples Center.
Although Downtown has evolved significantly since Mack Urban acquired the sites, Keller said the developer’s strategy has not. He acknowledged the massive residential growth in Downtown and specifically South Park — “while we’re not enthusiastic about the competition, we welcome it,” he said — but added that the scope of Mack Urban’s plans set its projects apart from others.
That includes the developers who may look to flip buildings shortly after they are completed.
“Our intent is to own these assets long term,” Keller said.
Mack Urban is currently in the planning process for the next phases of its mega-project. They include a 60-story, 713-unit tower at 1120 S. Olive St. and a 536-apartment, 51-story high-rise at 1115 S. Olive St. Keller said that both projects are in the site plan review phase, and anticipates them opening around 2025-2026.