Pacific Ocean Plaza in Santa Monica.

Pacific Ocean Plaza in Santa Monica. Photo by Courtesy Photo

The first new luxury apartment development since 2008 in downtown L.A.’s South Park neighborhood broke ground last week.

Century West Partners, a partnership of Chicago’s Fifield Cos. and West L.A.’s Cypress Equity Investments, started construction May 22 on the first phase of a three-building, 440-unit complex, called Avant, on Figueroa and Flower streets south of West Pico Boulevard.

The first phase, at 1340 S. Figueroa and 1355 S. Flower, comprises two seven-story buildings with 247 apartments above 11,000 square feet of ground-floor restaurant and retail space. The apartments will include live/work units, studios, and one- and two-bedrooms. It is scheduled for completion in November 2013.

Construction on the second and final phase, at 1500 S. Figueroa, with 194 apartments, is scheduled to start early next year. The completed project will include a fitness center, lounge, roof deck, pool and theater screening room.

“As the country has moved toward a rentership society, the timing is right to bring a new upscale residential property to this … L.A. market,” said Michael Sorochinsky, Cypress Equity principal.

Carlyle Group, a prominent Washington, D.C., private-equity group, is providing equity financing, while Comerica Bank and Bank of the West are providing construction financing.

Rental prices have not yet been announced, but as a yardstick, the last luxury multifamily complex built in South Park – the 311-unit Evo South at 1155 S. Grand Ave. – available units rent for $2,600 to $5,900 monthly depending on the unit.

Booming Demand

If anyone needs any more evidence of the growing demand for housing in the greater downtown area, a new report shows the apartment vacancy rate is dropping faster than on the Westside.

The report, from Marcus & Millichap Real Estate Investment Services, shows that downtown’s apartment vacancy rate fell 1.3 percentage points to 3.2 percent in the first quarter compared with a year earlier.

That’s one-tenth of a point better than the Westside submarket’s vacancy rate, which dropped eight-tenths of a point to 3.3 percent during the same period. The strong demand prompted downtown landlords to raise monthly asking rents 1.5 percent to $1,354, while Westside asking rents rose at a slower 1.3 percent pace to $1,929 during the period.

The report notes that recently employed new college graduates are moving into downtown neighborhoods that are more affordable than the Westside but still considered trendy and up and coming. It also said developments such as the City Center Target at downtown’s Fig at 7th retail center as well as the possible downtown National Football League stadium are drawing young renters.

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