DOWNTOWN LOS ANGELES - It won’t come as a surprise to those who live and work in Downtown Los Angeles, but a lot of people who still think L.A. ends at La Cienega are about to get a shock: The Central City may be ready to claim bragging rights as the business center in the region over the next decade.
We are aware that some will roll their eyes. In fact, we often give our friends grief for using words like “resurgent,” “energetic” or even “transformational.” But as students of Downtown who watched the first economic boom with the building of the Convention Center in the early ’70s and the surge of development in the late ’80s, we believe we can stand behind these words. These statements describe what is finally happening in our great urban center.
Before and even during the early stages of the residential revival that began in 2000, Downtown was lamented by some planners and politicians as “the urban core that would never be.” Now, with tens of thousands of new residents, several major hotels announced, an explosion of proposed lifestyle office spaces and a number of entertainment venues, the promise of a major shift is finally being delivered.
This is all being felt in the business community as well. Traditional financial services, accounting and law firm tenants are no longer maintaining oversized footprints in the commercial core as they diversify. Rather, a new generation of businesses, as well as revamped firms seeking a dynamic, 24-hour experience, are quickly taking their place. Downtown is changing and evolving, and we think it’s for the better.
The creative industries in Los Angeles, comprised mostly of entertainment, technology and media, have been leading the economic recovery and will shape the future of real estate development. Even traditional office users, who must attract talent and constantly evolve in a technology driven world, now place great value on access to public transportation and the concepts of urbanism. We’ve seen the year-over-year lease rate improve in large part due to increased demand for Class B office space (historic buildings and structures that average 12 stories). As these new 21st century tenants are being priced out of the Westside via high rents or a lack of vehicle accessibility, there is strong evidence that they aren’t interested in the staid old standards of Class A office buildings Downtown. Instead, they’re looking for flexible space that they can shape for themselves and access via public transportation in a pedestrian and bike friendly environment.
Downtown is one of the few areas in Los Angeles where residents and office workers are opting to go “car-free.” The subway and light rail lines are driving growth in communities that were cut out by traffic, and the streetcar may be back, allowing for a flow of new Downtown shoppers and residents from other parts of the city. Innovative companies like Zipcar, bike sharing programs and increased bus transportation are finally creating a network of options for local residents.
As a father-son team representing multiple generations, we recognize the need to create environments that reflect the desires of a growing, flexible workforce. At our building, PacMutual, overlooking Pershing Square, we’re seeing a huge spike in demand for communal brainstorming tables and inspiring outdoor reading nooks. We’ve encountered prospective tenants looking for functioning windows, exposed brick and high ceilings. They care more about Wi-Fi and surrounding amenities than layers of security and built-out cubicles.
This shift in work habits is having a profound impact on the whole community, beyond office walls. All of a sudden many of the people who used to leave at 5 p.m. are staying after dark and then coming back on weekends.
The residential market in Down-town has grown significantly in the last five years. There are now more than 50,000 permanent residents, including 19,000 families. To give some perspective, downtown Denver has only 20,000 permanent residents.
There is more. Downtown L.A.’s first charter school is in the works and young professionals are exploring new stores, visiting friends who have moved here and flooding the streets for Art Walk. Increased hotel options have brought back tourists who are much more comfortable in an environment that has multiple public transportation options. Projects like Grand Park that add beauty and green space to the neighborhood continue to improve the Downtown experience.
While things are certainly looking up for Downtown, there are still major issues that the city and county must address, among them homelessness, faster build-out of our impending public transportation projects, and more business friendly policies.
We believe Downtown is returning to its roots as the hub of business, culture and transportation for Southern California. As more and more people look for a quality of life not dominated by the single occupancy vehicle, as more businesses see the value of a density of creative businesses and as more amenities are built in Downtown, an L.A. of generations past will drive us forward.
Nelson Rising is the chairman and chief executive officer and Christopher Rising is the president and chief operating officer of Rising Realty Partners.
© Los Angeles Downtown News 2013