With thousands of new apartments being built in downtown Los Angeles, a Canadian developer is looking to set itself apart by offering fully furnished units in its nearly completed $200-million luxury high-rise.
In an unusual strategy, all 300 units in the 33-story tower at 888 S. Olive St. will be furnished with sofas, beds, multiple big-screen televisions, along with pots, pans and nearly everything else renters will need to live there.
It's corporate housing with a Hollywood edge that underscores downtown's revival as a thriving urban center.
In addition to targeting business travelers on temporary assignment in Los Angeles, the apartments are intended to lure affluent newcomers who want to hit the ground running while they look for permanent housing, the developer said.
The developer, Vancouver-based Onni Group, is attempting to carve out a niche in an increasingly crowded apartment market downtown, said market analyst Paul Darrow of real estate brokerage Institutional Property Advisors. He is not involved with Onni's project, which is being dubbed Level DTLA.
The neighborhood south of the city's financial district is particularly active, attracting billions of dollars' worth of residential, hotel and retail development under construction or in the pipeline.
"A lot of people are wondering about the depth of demand in South Park," Darrow said, and whether supply might outpace demand before the building boom is over.
Onni, he said, gets "a competitive edge" by offering a different product type.
Downtown's most prestigious new apartment buildings such as the Watermark, Apex, Emerson, and 8th & Hope typically set aside 5 to 15 units to be managed as corporate housing, Darrow said, but no other developer has attempted to reach the extended stay crowd on this scale.
"I don't think the market has been tested in Los Angeles," he said.
Tenants in such units tend to stay about one to three months. They tend to prefer a hotel-like atmosphere and are willing to pay a premium for rent if the complex has high-design elements that give it an air of luxury.
"People don't want to feel like they are living out of a suitcase," said Javier Cepeda, a regional vice president at Onni Group. "They want to cook breakfast in the morning and enjoy a home while they are working or relocating to the city."
To appeal to affluent travelers, Onni Group is putting hotel-style features in the building along with upscale residential finishes such as high-end Sub-Zero and Bosch appliances. Units will have one to three bedrooms, floor-to-ceiling windows, a balcony, laundry facilities and multiple televisions.
There will be a large indoor-outdoor fitness center on the fourth floor with equipment, personal trainers, massage room, multi-sport court and spin studio.
Other communal areas will include an outdoor pool surrounded by private cabanas, hot tub and poolside bar. The roof will also have an outdoor dining area flanked by fireplaces and barbecues, and a steam and sauna area with rain showers.
There will be shops and restaurants on the ground floor of the tower at the northeast corner of Olive and 9th streets. Level DTLA is slated to open this summer.
With monthly rents starting at $5,000, Onni expects to lease units to traveling athletes and entertainers as well as corporate workers, Cepeda said. The company has one other furnished building, located in Vancouver, a popular location for filming movies and television shows.
"We work a lot with the entertainment industry," he said. "And travelers from California have asked when we are going to open in L.A."
Downtown is in the middle of a wave of new apartment construction and more condominiums are on the way, but market observer Richard Green, director of the USC Lusk Center for Real Estate, said there is room for more.
Apartment vacancy in Los Angeles County is low at about 3%, he said, and although construction is booming downtown and in a few other hot spots, there is relatively little new housing being built in the county.
"I am really not worried about overbuilding," he said.
Downtown may eventually have more high-priced units that it has tenants who can afford them, but the units could be quickly filled by lowering rents.
Developers "may not like the rents they get, but there is not going to be any difficulty filling [apartments] up," Green said.
Onni Group says there is plenty of unmet demand for downtown apartments and plans to build three more towers.
"All the new life coming to South Park is very exciting," Cepeda said. "Onni Group is very enthusiastic about the whole renaissance in downtown L.A."