Downtown sees bump in apartment construction

downtownapts.jpgAt least 10 buildings with nearly 2,400 units are either under construction or scheduled to break ground in the next 16 months, the Downtown News reports. Developers have been responding to a tight rental market (vacancies are down to 2 percent in many buildings). The emphasis on rentals comes after the downtown condo crash several years ago. Even today, condo sales remain soft.

It is an inarguably big, capital-intensive wave, with at least 2,396 units slated to break ground by 2013. Still, that will do little to relieve the supply pressure that is pushing rents higher, said Gary Painter, director of research at the USC Lusk Center for Real Estate. According to the Downtown Center Bus iness Improvement District's 2011 Down town Demographics Survey, there were 28,861 housing units in the area at the start of 2012. That means the 2,396 apartments in the pipeline reflect a potential 8% increase in supply, and even if all those get built, they won't open for one to three years. "We're not talking about a number that's going to relieve pressure on prices," Painter said. "It's going to decrease the rate of increase. That's all."

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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