DTLA Alliance Report Shows Fresh Progress in Downtown
DTLA has faced numerous challenges since COVID-19. However, the latest Q2 2024 report from the DTLA Alliance reveals ongoing positive developments in Downtown Los Angeles.
Q1 & Q2 2024 Highlights
The key takeaway of the report is continued positive engagement with Downtown. While our industry is most focused on those returning to the office, we also benefit from a general increase in DTLA visitation.
We need people back in DTLA, period.
Despite ongoing challenges in the office market due to shifting workplace trends, DTLA’s business appeal remains strong.
Notable developments include:
US Bank's Renewal: A 105K SF lease renewal at the US Bank Tower, reaffirming its long-term commitment to the area.
New Leasing Activity: Significant new deals such as Reed Smith's 41K SF lease at City National Plaza and Industrious securing 45K SF at FourFortyFour South Flower.
Key Transactions: The sale of 617 W 7th Street by Swig to the Shomoff Group, further showcasing investor confidence in DTLA’s potential.
LA Convention Center Renovation: The City Council's approval to renovate the LA Convention Center is a game-changer, expected to draw millions of visitors, particularly with the upcoming 2028 Olympics.
Other findings:
Worker Presence: 65% of employees now work in-office 3-5 days a week, with 79% of employers planning significant on-site time. Notably, 91% of workers also visit DTLA on non-workdays, showing strong engagement with the area.
Metro Improvements: Over 51% of respondents in the Q1 survey reported an improved Metro experience, enhancing DTLA's accessibility.
Visitor Surge: 2023 saw over 17 million visitors, with improved safety perceptions among survey participants.
Stable Visitation: Monthly visits to DTLA have stabilized at 8-10 million, demonstrating resilience even though they remain slightly below pre-pandemic levels.
Market Metrics: The average Class A office rent stands at $3.84 per square foot, with a 31.5% office vacancy rate. Which is an increase from the first quarter.
Workplace Recovery: Workplace visitation is on the rise, with worker numbers hitting a new post-pandemic high and visits per worker increasing for three straight quarters.
This data underscores the progress being made in avoiding a potential "doom-loop" for DTLA.
The growth in engagement and visitation enhances the region’s attractiveness for investment, which in turn, benefits BOMA/GLA members as more businesses choose to stay or relocate to Downtown.
How it Impacts You
Despite higher vacancy rates, the office market shows resilience with notable lease renewals and transactions.
With shifting workplace trends, there may be increased demand for adaptive reuse or mixed-use properties.
There is a positive trend in visitation, worker presence, and upcoming major events like the 2028 Olympics. Which can encourage more long-term investment and development for DTLA.
Looking Ahead
BOMA on the Frontline remains committed to reporting on DTLA's progress. Our Downtown Regional Council set a goal of elevating positive stories about DTLA.
The region enjoys so many food, shopping, and cultural venues within a small area. The buildings in the region are some of the most iconic in the country.
The elements are there for a robust city center again.
Stay connected with us at BOMA on the Frontline for the latest news in the Greater Los Angeles area.
