The residential vacancy rate in Downtown dropped to 10 percent by the end of last year, amid the rapid pace of development there, notably in the luxury sector.
The most recent numbers compared favorably to the first quarter of 2017, when the vacancy rate reached 12.4 percent.
More than 1,600 new luxury units opened in Downtown in the first half of 2017 alone, CoStar analyst Steve Basham told Urbanize LA. The influx of new luxury units were quickly scooped up, with vacancies dropping to 10.3 percent in that category, from 16 percent.
Developers have increasingly invested in luxury projects in DTLA neighborhoods that hadn’t previously been considered as desirable, hoping to attract young and affluent tenants with millennial-targeted amenities.
Overall downtown rental prices meanwhile, have hardly budged, in contrast to the 3.3 percent growth in Los Angeles County.
CoStar predicts rent growth will steadily drop over the next few years, from 2.9 percent countywide in 2018 to 2.2 percent in 2019. Some 7,000 units are expected to come online in Downtown through 2020. [UrbanizeLA] –Dennis Lynch