The buzz around downtown Los Angeles continues as Wall Street investors have amped up their spending this year on the area’s booming commercial district. According to a report in the Los Angeles Times, investors from New York City have increased their dollar volume of investment in downtown Los Angeles by an impressive 23 percent, showing that although it’s always been a world-class city, Los Angeles is only now finding its stride as an architectural and business powerhouse.
Since the beginning of 2012, New York investment in Los Angeles county has overcome $4.4 billion. Buyers are finding a new and exciting market on the West Coast and Southern California home owners are likely to benefit from their interest. Developers and investment companies are picking up Los Angeles county property for office buildings, hotels, warehouses and apartments.
The focus of these investors is not only to make way for the new, but to preserve a lot of the architectural history of Los Angeles as it closely resembles the neighborhoods of New York before development swept through, modernizing and sterilizing the vibrant boroughs of Manhattan. One of the most notable purchases in downtown is the July acquirement of a long-vacant 1920s-era office building. Developers hope to preserve the historical facade of the building while transforming the interior into a high-rise luxury apartment building.
“Los Angeles has hit critical mass in downtown,” said Greg Vilkin of New York-based real estate firm Related Cos, to Los Angeles Times. “Firms from New York show up and say, wow, I see the potential I saw in Hell’s Kitchen a decade ago. I watched TriBeCa, and the High Line, and I see what’s going to happen.”
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New York investors haven’t been the only entities to take notice of the emerging Los Angeles market. A strong contingent of Chinese and South Korean investors have also been making claims to downtown sites, however the prospect of investors on Wall Street marks a dramatic turnaround in the perception of downtown Los Angeles.
Prior to the last few years, many New York money managers were known to have a disdain for downtown Los Angeles. Many thought of it as an enormous office park with high-vacancy rates and not enough excitement to make the area a major economic powerhouse. Today that sentiment is very different as investors are snatching up properties downtown such as the Fine Arts building and other Southern California properties such as the Clock Tower office building in Santa Monica and the El Royale apartment tower in Hancock Park.
Now growth is a major factor in downtown, as the city itself has invested billions of dollars in revitalizing ailing neighborhoods and important entertainment and retail destinations.
“Downtown has multiple dynamics: residential, hospitality, sports and entertainment and a burgeoning retail and restaurant [scene],” Dean Rostovsky, director of West Coast acquisitions for Clarion Partners, to Los Angeles Times. “That excites real estate guys like us.”
If you are interested in learning more about the exciting Los Angeles real estate market, contact our team of luxury property experts today.