Once called a ghost town, the neighborhood west of the Harbor (110) Freeway near downtown is now dotted with apartment construction.
The driving force behind the upswing in the Central City West rental market is the desire to live close to the employment center. This new workforce seems reluctant to buy property in the area, given the overall downturn in the housing market. With more downtown workers entering the rental market, rates have been increasing.
Mixed-use apartments in the Central City West area, such as the recently opened Glo and the soon-to-be unveiled Canvas, are reaping the benefits of a sagging sales market in a high-demand area.
“We’ve leased 17 units during the past two weeks and we are now at 65 percent occupancy since we opened in November,” said Tom Warren, president of Holland Partners, which developed the 201-unit Glo at the corner of Wilshire Boulevard and Bixel Street.
Realizing the demand for housing near downtown, developers such as Warren have embraced the 1999 adaptive-reuse city ordinance that allows landowners to develop residential, high-density housing in areas that were formerly zoned for commercial use.
Holland Partners, based in Vancouver, Wash., recently acquired a 4.1-acre block in the Central City West neighborhood with plans to build a mixed-use development. The company is planning a 650-unit apartment building with about 40,000 square feet of retail space for the parcel at the corner of Sixth Street and Wilshire Boulevard.
Holland Partners is also planning a 400-unit, mixed-use apartment project at 1111 Wilshire Blvd. in the neighborhood.
Warren is banking on a number of factors that he believes are attracting renters to the area west of the Harbor Freeway, but none is more significant than the area’s employment opportunities.
There are about 6,800 jobs within a two-block radius of the 1050 Wilshire Glo project, Warren said. And while there are 450,000 jobs within a 1-mile radius of downtown, only 7,500 residential units are available in that same area.
Demand for housing close to downtown’s financial district is significant, with 12 jobs per unit in and around downtown, compared with an average of 3.2 jobs per unit for all of Southern California.
Views, overpasses
Selling points for the neighborhood are its hilltop views. Also, pedestrians can walk to downtown across overpasses.
With rents in these newly developed and planned apartments ranging from about $1,800 for a studio to $5,000 and up for a two-bedroom unit, upscale amenities such as pools, observation decks, gyms and cutting-edge soundproofing are expected.
Freeway proximity can be a problem, though. Alliance Residential Co. had to take noise reduction measures on Canvas LA, a 100-unit, mixed-use apartment project overlooking the Harbor Freeway at 138 N. Beaudry Ave., north of First Street in the Central City West neighborhood.
The apartments required two sets of double-pane glass in each window facing the freeway, said Thomas Cox, president of TCA, an architectural firm that designed Canvas LA for Phoenix-based Alliance.
Central City West exemplifies the bullishness of the apartment market throughout Los Angeles.
The 2008 edition of the National Apartment Index ranked Los Angeles as the No. 6 market in the nation, moving it up three positions from last year. The report also estimates that 4,700 apartment units are slated for construction in the Los Angeles area during 2008.
“The high-priced housing market and rise in luxury apartments as well as the condos transitioning into apartments most likely played significant roles in this increase,” said Terry Slattery, vice president and general manager of For Rent Media Solutions, real estate analysis company.
The apartment construction shows that downtown’s condo boom stopped at the
freeway. There has only been one reuse condo project completed 1100 Wilshire. The rest of the neighborhood will be
occupied by renters.
