How likely is the Downtown area of LA to appreciate over the next 3 years? ?

Asked by Eric Wu, Russian Hill, San Francisco, CA Fri Mar 2, 2012

Is Downtown ready for an upward spike in the short-term? What would cause this to occur?

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11
Billy Rose,…, Agent, Beverly Hills, CA
Sat Mar 3, 2012
Responding to William Dorich: William, you are correct, there more infrastructure is needed to fully round out Downtown LA. But that infrastructure is on the way (and in many respects already there): there is now a large Ralph's Market (one of the top grocery stores in the entire Kroger chain!); there are 24/7 Rite Aids and Walmarts. Equinox is moving in. The list goes on. LA LIVE is not the answer to the Downtown dweller's daily needs, but it has served as the catalyst which increased investment and population. As more housing and hotel rooms are built (and there is a Billion Dollars or so already under construction), there will be an increased Downtown population which will spur additional the provision of yet additional services. Also, as for the safety of the area, the recent Kosmont study reported that Downtown LA is safer than Tulsa, OK and Columbus, OH. I walk Downtown regularly alone at night and have not seen anything which would cause concern. To me, the appreciation factor in Downtown LA is certain.
2 votes
Billy Rose,…, Agent, Beverly Hills, CA
Sat Mar 3, 2012
PART 2 TO MY POST (SORRY SO LONG)

Significantly, the recent opening of The Ritz-Carlton Residences at L.A. LIVE is both a signpost and a critical component to Downtown’s evolution. The introduction of The Ritz-Carlton Residences’ luxury-caliber condominiums to the Downtown landscape provides much needed executive-level accommodations to the Downtown workforce, thus enabling top executives to actually live Downtown without feeling like they are sacrificing creature comforts or having to adapt to a more Bohemian lifestyle (and, for a price which, compared to other major metropolitan American cities, looks like a bargain). Moreover, the incorporation of the legendary Ritz-Carlton brand into Downtown, and the broad consumer reception of the Residences, speaks volumes as to the direction in which Downtown LA is accelerating.

As more people fill Downtown’s growing number of condominiums, hotel rooms and apartments, the pedestrian population will continue to swell. And, though the Farmer’s Field and LA Convention Center Expansion projects will, undoubtedly, markedly enhance the Downtown LA experience, in my opinion, it’s the envisioned “Avenue of the Angels” (a vehicular-free pedestrian “highway” connecting L.A. LIVE to the Walt Disney Hall) which will be most transformative to the Downtown lifestyle. This galvanizing improvement is the final puzzle piece which will deliver Downtown LA “back to the future”. It will return Downtown Los Angeles to the point where it is, once again, the hub of Los Angeles; a downtown center which looks back referentially to the glorious days of historical Downtown Los Angeles (with its fantastic architecture and wonderfully designed city plan). At the same time, however, progressive vision of a pedestrian-centric Los Angeles will cement Downtown LA’s place in the global pantheon of great cities as one of the world’s most exciting and sought after places to live.

Downtown LA. It’s time again.
Web Reference:  http://www.theagencyre.com
1 vote
Billy Rose,…, Agent, Beverly Hills, CA
Sat Mar 3, 2012
HERE IS A RECENT ARTICLE I WROTE -- POSTED IN TWO PARTS

Not long ago, for most Angelenos, Downtown was somewhere you worked or went to Lakers games – period; end of story. What may come as a surprise to some, however, is that Downtown LA is enjoying a renaissance much like that of SoHo, New York in the 1980’s, San Diego’s Gaslamp Quarter in the early 1990’s, and Manhattan’s Meatpacking District in the late 1990’s.

As of 1900, the population of Los Angeles swelled to 100,000, and, by 1920, with the arrival of the Southern Pacific and Santa Fe railroads, LA had become a major metropolis, with Downtown as the city center. The Downtown area served as the hub (and its population continued to grow) until the end of World War II, when a more suburban lifestyle, enabled by a sharp increase in automobile ownership and the development of the Los Angeles Freeway System, grew in favor. Consequently, many corporate headquarters relocated from Downtown, and several, resultingly-vacant, historic buildings were demolished in favor of parking lots (which were more profitable as a result of, and were more needed to accommodate, the burgeoning “car culture” of LA). As the Downtown population diminished, the store-front businesses, once frequented by a now-extinct pedestrian population, shuttered. Downtown LA became a “destination” – primarily for business.

Owing, in part, to the creation of the Adaptive Reuse Ordinance in 1999 (which enabled the conversion of historic buildings to residential living and provided certain tax or other financial benefits), an astounding $15 Billion Dollars in investment cascaded in to Downtown over the past decade. Factoring in significantly to Downtown’s transformation has been Anschutz Entertainment Group’s (AEG’s) development of the $375 Million Staples Center (home to four professional sports franchises – the NBA’s Los Angeles Lakers and Los Angeles Clippers; the NHL’s Los Angeles Kings; and the WNBA’s Los Angeles Sparks) and the contiguous 27-Acre entertainment complex known as “L.A. LIVE” (a $2.5 Billion Dollar development by AEG). Comprising 4 Million square feet of concert theaters, hotel rooms, restaurants, bars, ballrooms, broadcast theaters, movie theaters, and condominium residences, L.A. LIVE is internationally recognized as the home of the Grammys, the Emmys, the Video Music Awards, American Music Awards, People’s Choice Awards and the X Games.

As they say, “a rising tide lifts all boats”. With the success of L.A. LIVE and the introduction of previously-lacking residential support amenities (such as the 2007 opening of the massive Downtown Ralphs grocery store – one of the highest grossing stores in all of Los Angeles; the opening of multiple 24-hour Rite Aid and Walgreens drug stores; and the imminent opening of the spacious Equinox facility), residents and developers alike are relocating to Downtown LA. Currently, more than $1.5 Billion is under construction Downtown yielding the new Broad Museum, nearly 1,000 hotel rooms, new parks and plazas, and hundreds of thousands of square feet dedicated to more retail, condos and apartments, and restaurants and bars.

Downtown LA is poised, once again, to be the hub of metropolitan Los Angeles. And, to me, it’s unstoppable. Because of its weather, cosmopolitan mix of people, richness of cultural and entertainment options, proximity to Asia, and a wealth of other reasons, LA’s population is growing. As a result of such higher density, along with a continued increase in traffic, Angelenos are seeking out neighborhoods where they can live, work, walk and play. The post-World War II development of LA, which was based on a prevalent car culture, leaves Downtown as the one area in Los Angeles which can deliver it all – a vast number of jobs; countless cultural, entertainment and sports options; a diversity of restaurant and nightlife alternatives; numerous parks and community gathering spaces; and a growing number of retail offerings – all walkable within a locale which features a rich variety of architectural styles, both old and new.

It’s no surprise, then, that GQ Magazine recently declared LA the “Coolest City on the Planet”, with Downtown LA providing 5 of the Top 10 reasons; that many of LA’s hottest and most heralded chefs are opening eateries Downtown (LA Weekly’s last annual “99 Essential Restaurants” included 12 Downtown eateries); and that several housing, retail, and other developments are in the process of gaining approval and financing. Most notable among those developments making their way through the pipeline are the Farmer’s Field and LA Convention Center Expansion projects, aggregating nearly another $2 Billion of investment, which would bring NFL football back to LA and which would replace an aged portion of the Convention Center with a new and expanded section.
Web Reference:  http://www.theagencyre.com
1 vote
William Dori…, Agent, Beverly Hills, CA
Fri Mar 2, 2012
I do not own a crystal ball, but I do have the next best thing ... intuition, a good gut feeling backed by 20 years of experience in Real Estate and a track record for predicting property values.

In 2009, I wrote and published the book, Defeat Foreclosure, with trial lawyer Merle Horwitz in which we predicted that property values in Beverly Hills, Westwood and Santa Monica would decrease by 35%. My real estate colleagues called me crazy and demonized our book.

Here we are 3 years later and property values on the Westside of Los Angeles have fallen, not 35% but closer to 40% ... call me insane, but I would not encourage a client to buy a piece of property in downtown Los Angeles even if the current listing prices were dramatically slashed by 25%.

Downtown will not come to life or even fog a mirror until 2018... I am telling my clients to invest in areas of desirability, closed to the best schools and transportation and stay clear of speculation where profits are currently in a coma and agents are telling you that "Its the best investment environment since the Great Depression." Don't you believe them! I grew up in the coalfields of West Virginia, I know poor and all about “hard times.” I know when someone is pissing down my leg and convincing me that it’s raining. There are commission whores in Real Estate just like those on Wall Street, eager to steal you blind. Bloodsucking has become an art form in this sick economic environment. First trust you own intuition before you trust a Realtor you barely know.

William Dorich, Realtor/Author
1 vote
Lucia Reed, Agent, Los Angeles, CA
Fri Mar 2, 2012
Since no one has an accurate crystal ball, it really is a guessing game based on a huge amount of factors whether an area will go up, down or stay stable.

I can guess that over the next ten years there will be a good increase but three years is too short a time in todays precarious market. My guess is that it will go up a little more than other areas for the same reasons other agent's listed below, new developments and big money investments in the area. I think overall Southern California, more specifically greater Los Angeles, and Westside areas will continue to be relatively stable and inch upward as a whole.

The reason I prefer real estate investments in comparison to stocks is that RE is tangible. You can touch, use and control it yourself. You can see what you have as opposed to a piece of paper (stock) in which you may or maynot have a CEO stealing from the company or doing things that should be illegal.

The price of your RE investment can not only be influenced by the bigger market (country), to the County, to the neighborhood, to the block, but also the specific building and even unit. Your unit may spike upward because YOU did a few needed improvements. Follow that by getting your neighbors to also fix theirs and soon the whole area can spike.

This is just one of the many things that can make a property "spike" up. Trends start with one sale.

If you like my answer and are interested in buying or selling a property with me, please call, text or email. (909) 936-0000

I am a Broker with several small offices around Los Angeles as well as being a native Angeleno and daughter of an architect who was one of the founders of the So Cal Chapter of Architectural Historians and long time member of the LA Conservancy (they have great tours of Downtown buildings). My ties to Downtown LA go back to my grandfather who bought and sold buildings in Downtown LA between the first and second world wars.

Lucia Ferreira
Sunset Palms Real Estate, Inc.
1 vote
Justin, , Los Angeles, CA
Mon Mar 5, 2012
Downtown Los Angeles still has a stigma attached to it from years ago; most people live in Orange County, drive 1.5 hours to work everyday, and don't really walk around or even see downtown L.A., expect when they are pulling into their office's garage. When I moved here in 2008, 7th Street had (2) Macy's (long story) in close proximity and that was about it; now it is a restuarant haven for the town's people and tourists. Yes, it is true that the Staples Center and Nokia theater don't add much value to the everyday person living in dowtown, but it does increase the police presence and we now have officers riding on fake segways. All jokes aside the money has been good! Spring street is a little rougher, but has plenty of hipster hangouts. Speaking of Staples and Nokia, Southpark obviously has some really nice real estate. Talk to someone who really LIVES in dowtown and gets it. I am a landlord, and I can tell you that rents are on the rise starting this year - not our fault - taxes have increased. The Evo and 1100 Wilshire are some of the nicer places; there are also discount places in the 90012, 90013, and 90014 zipcodes. I would be glad to talk to you about what is good. I am not a broker, agent, not selling ANYTHING, and I have no agenda.
0 votes
William Dori…, Agent, Beverly Hills, CA
Sat Mar 3, 2012
In response to Billy Rose and his comment: "Factoring in significantly to Downtown’s transformation has been Anschutz Entertainment Group’s (AEG’s) development of the $375 Million Staples Center (home to four professional sports franchises – the NBA’s Los Angeles Lakers and Los Angeles Clippers; the NHL’s Los Angeles Kings; and the WNBA’s Los Angeles Sparks) and the contiguous 27-Acre entertainment complex known as “L.A. LIVE” (a $2.5 Billion Dollar development by AEG). Comprising 4 Million square feet of concert theaters, hotel rooms, restaurants, bars, ballrooms, broadcast theaters, movie theaters, and condominium residences, L.A. LIVE is internationally recognized as the home of the Grammys, the Emmys, the Video Music Awards, American Music Awards, People’s Choice Awards and the X Games. "

NONE of this works well in a living lifestyle. How often does a person attend one of these sports and entertainment functions and how many people do you know that can afford the $100 to $250 price tag for those tickets? Not many! Missing from this 21st century bravado about LA'sTomorrowland is the lack of daily living needs... like markets, shoe repair, dry cleaners and all of those conveniences in a high rise. Worth consideration is the safety of the area... would you want your wife and children walking the streets after dark?
0 votes
Ron Escobar -…, Agent, Beverly Hills, CA
Fri Mar 2, 2012
So you want me to guess and let you know whether something is going to go up on the short term... hopefully you are not making a "buying real estate" decision based on speculation... I believe is going to go up at a very good pace, but long term... in short term is going to up, and down... and it depends what area of downtown and what building...

in general there is good supply of buildings and the credit liquidity (mortgage underwriting) is still very tight, so that will keep downward pressure on buildings. We are in escrow in two properties for our clients in that area... so there is activity....

best of luck!

Ron Escobar, NBA
Broker & General Contractor
http://www.select-realestate.com
0 votes
James Pitcher, Agent, Los Angeles, CA
Fri Mar 2, 2012
Hi Eric,
No one on the planet can give you a definitive answer to this question. There have recently been new developments in DTLA that are attractive to buyers looking to live in this setting. Please visit http://www.ladowntownnews.com and use the "development" tab to review what is happening here, form your own judgments about the investment opportunities. I liked the article "Bringing Back the Building: The Latest Information on 70 Downtown Projects". If you decide to invest here, and I think you will, I would be glad to help.
Sincerely,
James
0 votes
Lisa Ledson, , Napa, CA
Fri Mar 2, 2012
Hi Eric. I specialize in the Hollywood Hills and Beverly Hills areas. As for Downtown, that market isn't looking to appreciate any time soon. There has been a substantial amount of activity in my market since January 1st, 2012 but we aren't seeing an uptick yet in prices due to that velocity. Fingers crossed that the activity means we've hit the bottom of the recession and the market will begin to recover. Are you solely interested in purchasing in Downtown? If so, what is your criteria? (Price, square footage, property type, etc) -Lisa Ledson
0 votes
Abe Chang, Agent, Los Angeles, CA
Fri Mar 2, 2012
Downtown will see a gradual increase over the next few years. If you're looking for a short term gain, it most likely will not happen. Are you familiar with DTLA? Despite the economy, businesses are still popping up everywhere, which shows people have faith in DTLA. Various projects are still being planned such as the LA Streetcar, the subway connector rail, possibly Farmer's Field, Bringing Back Broadway, the Broad museum around the Grand Ave project.
0 votes
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