Residential blocks east of
Six real estate parcels, now mostly parking lots in the shadow of AT&T Center, have been purchased in what may be the largest downtown land acquisition since the recession. And a $750-million residential complex there is on the drawing boards.
Sleek high-rise apartment towers, shops and restaurants are to rise along a path of real estate development spreading east from Staples that is transforming a former asphalt-covered dead zone in South Park into a more pedestrian-friendly neighborhood.
"We are delivering what Gen Y wants — comfortable homes well laid out with all the bells and whistles," said President Matthew Burton of developer Mack Urban. "We believe we can do it at an affordable price point with top-of-the-line amenities and views."
The units would be smaller than most downtown, Burton said. Rents, however, would start at about $2,200 a month, below what is common for other new buildings there, he said.
The project is the first for Mack Urban, which was formed in August to build multifamily housing in Southern California and the Pacific Northwest.
Mack Urban paid more than $80 million for 6 acres on six sites roughly surrounded by Grand Avenue, 11th Street, Hill Street and Pico Boulevard. Aecom Capital, the investment fund of Aecom Technology Corp. of Los Angeles, is Mack Urban's partner in the acquisition and development.
The firms' recent purchase from seller Evoq Properties was the largest land deal by acreage in the downtown business district since the economic downturn brought real estate activity in the area to a near-halt, said Paul Keller, chief executive of Mack Urban.
Plans are in early stages and must wend their way through the city's approval process. The company's goal is to build about 1,500 apartments in a yet-to-be-named community dotted with small parks and linked by public walkways and alleys. The complex might also eventually include a hotel.
Unlike most new high-rise residential developments that are characterized by their owners as "luxury," Mack Urban plans to go after a wider swath of renters, including young people priced out of other new buildings.
Part of the challenge of making the units attractive lies in tying the properties together and transforming the area's big, unwelcoming blocks into a neighborhood with its own character, said architect David Martin of AC Martin Partners.
"Towns with smaller blocks are more charming and more interesting," Martin said. "So how do we make streets more pedestrian-scale?"
His proposed solution is to surround the development's apartment towers, stores and restaurants with public spaces worth strolling. There would be narrow alleys lined by townhouses, walkways meandering through the blocks and what Martin calls vest-pocket parks.
"There will be a number of experiences" for people on foot, he said. "A small park, a nice boulevard and then a cut through an arcade into a secret garden and then off to another boulevard."
The improved streetscape would abut work done in the last real estate boom by developer South Group, which built three luxury high-rise condominiums to the west in the 2000s, Martin said. Condos in those buildings sell for more than $1 million.
Residential development was also approved back then on what is now Mack Urban's property, but failed to get underway after the housing market crashed. City officials still need to review final plans.
"It's great to see long-entitled high-rise projects moving forward again," City Councilman
"If you consider the future needs of downtown, it's clear we need to be building high-rise housing and high-rise hotels right now — especially in South Park, along the streetcar line and near the Convention Center," he said. "I'm pleased to see the projects envisioned for these parcels coming closer to becoming a reality."
A new streetcar line serving downtown is set to travel along 11th street. It was approved by downtown voters and is intended to open by 2015 but may be delayed by funding shortfalls.
Another mixed-use apartment development across 12th street from Mack Urban's property is set to get underway in January. It will be built by Beverly Hills developer Sonny Astani.
If Mack Urban's design gets the go-ahead from city officials, construction on that project would begin in late 2014 and continue in phases over the following decade.
More apartments are on the way for downtown Los Angeles and other urban centers because the majority of America's two largest population groups — baby boomers and millennials — are living without children, real estate investor Richard Mack said.
"We believe the demographic trend is away from home ownership and toward urbanization," Mack said. He is chief executive of New York-based Mack Real Estate Group, which is a partner of Mack Urban.
Downtown Los Angeles has passed the tipping point of viability as a residential neighborhood, he said, with enough stores, restaurants and cultural amenities to sustain growth for years to come.
"We feel that over a long period of time," he said, "downtown L.A. will see significant in-migration of both owners and renters seeking an urban lifestyle."