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Mid-City – Gentrification and Development – Adams/Jefferson/Washington/Venice/Pico

Investors are drawn to an area to fulfill maximum return objectives while minimizing the amount of risk they face. Current transformations of the mid-city are allowing real estate investors to gain advantages from the gentrification process. Assessing financial benefits derived from purchasing a property and return objectives, risk performance and specific considerations such as area income and capital appreciation when determining an investment decision.

In our very active market — which includes streets: Adams, Jefferson, Washington, Venice and Pico — there is a general improvement in the quality of life as a result of improved consumer services, higher tax bases, and the beneficial effects of middle-class vigilance over community services. More individuals are willing to move to these areas due to the benefits and transformation. As developers and investors are recognizing this trend, we see active investments, more of them becoming involved in home and store renovations. As a result, signs of livelihood are transforming the market to fully maximize potential revenue of an area.

Not long ago, Downtown Los Angeles was a quiet fragment of LA that would clear out by the end of the workday leaving an abundance of properties unutilized and vacant. Even big box retailers were unheard of until about a century ago. Now DTLA is interrupted by construction and cranes with heavy flow of traffic that follows. As LA prepares for the Olympics in 2028, new apartments, hotels, retail and office spaces are redeveloped to fit with market needs. Existing structures are thoughtfully being recycled and the public transit is getting improved. As developments create more and more traffic, investors that recognize this trend are expanding to less affluent neighborhoods.

The changing consumer market is changing the needs of the area. As the University of Southern California expands, the need for new housing and amenities become required. The USC Village is the largest development in the history of South Los Angeles including 36 new retail spaces with Big Box retail stores such as Target and Trader Joes. While these new stores and facilities are convenient and useful for students, they also benefit developers targeting the area since the big box names increase the value of neighboring properties and drive up rents. In addition, the housing company “Tripalink” proves urban renewal is present. Tripalink is a co-living space for students and young professionals that is thought of as “an emerging market niche that shows the potential to be as big as the student housing space” (Radius+). The emergence of Tripalink and their expansion along South LA is creating an ambience that is transforming the area’s culture and building a safer community with less crime.

As a result of urban renewal, some fear a climate of ignorance, fear and division between different racial, ethnic and religious groups in which gentrification is responsible for creating a climate of fear, suspicion and segregation within local communities. Despite skepticism, developments of a new city transform the area into one with more cultural, social and economic significance. The transformation unites individuals by providing an opportunity for new and diverse businesses to enter the area and coexist. Different types of residents are brought together and thrive off the new market.

Prior residents are even encouraged to engage and enrich the transformation process to embrace the progressive renovations. West Adams now participates in a bike tour that meets off of Washington Blvd and makes several stops including art galleries, coffee shops, restaurants etc. and finishes by pointing out several homes listed on the market. A local agent hosts the tour inviting guests to tag along to get an agent’s perspective of the growing neighborhood or just to learn more about it. The tour emphasizes the area’s multiculturalism, art and history. However, local riders notice that the area has gotten “bougie” (Flores).

Plans for the area have been more active in recent years. Projects in the works by bigger developers have led to them opening up the door for investors by creating more buying opportunities to widen profit margins. Home prices and values have shot up — the median home price growing nine percent in the past year — allowing original owners to profit sufficiently and showing investors market buying potential. Strong interest remains in this area as urban renewal is expanding along the transit system. (Sentence) Gentrification persists in the area, however, there are still plenty of investing opportunities.

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