Massive mixed-use projects like Metropolis and Angels Landing are helping to transform Downtown Los Angeles, but the neighborhood is still “adolescent at best. It’s not even driving yet,” according to one prominent new development broker.
At The Real Deal’s DTLA Spotlight Showcase and Forum on Wednesday, a panel of top real estate developers and brokers helping to transform Downtown say the area has experienced dramatic change in the last decade but is still in the early stages, suffering from a lack of vital services, including schools. Still, the area’s infusion of restaurants and apartments has drawn people in.
“At this point, Downtown is a destination of choice — it’s not a backup plan, it’s not a result of being priced out of another neighborhood,” said Polaris Pacific’s Mike Akerley. “We’re no longer selling the dream of Downtown to buyers.”
Potential office tenants see it, too, said Rachael Zanetos, Brookfield Property Partners’ director of leasing. Tenants, she said, are increasingly interested in a location’s proximity to amenities that their employees want.
“When we tour large tenants through office space, it’s not about ‘Ok, what are our office expenses?” Zanetos said. “It’s, ‘what’s downstairs, how close am I to residential, how close am I to retail amenities?’”
Creating that vibrancy is a matter of tenant choice, but developers often have to weigh the “hipness” of a tenant with their viability, said Rising Realty’s Matthew Ahrens, who talked about leasing at PacMutual’s 460,000-square-foot office campus.
“You want credit, you want high rate, and you want something hip,” Ahrens said. “You’ll never get all three so you have to give on two. At PacMutual, we gave on rate and later we gave on credit because we wanted a specific concept for the specific space.”