Paseo Plaza - Hollywood, CA
Although world-famous Hollywood had been enjoying a definite renaissance over the past few years, most of the gentrification had been centered around its downtown core. Recently, our consulting group was asked by a developer to analyze the potential pricing and absorption for new condominiums and/or apartments that would be part of a large mixed-use residential and retail center called Paseo Plaza on the east end of a rapidly redeveloping Hollywood.
While at first glance (and at first drive around the immediate neighborhood) it was challenging to picture a gleaming new center in this most transitory of neighborhoods off of Santa Monica Blvd. near the Hollywood Freeway, the same conclusions could have been drawn of a very successful downtown Hollywood or a sketchy Wilshire & Vermont intersection just a few years ago.
The fact is that pent-up demand for new housing alternatives in the huge swath of land extending from the Pacific Ocean to downtown Los Angeles and from Interstate 10 to the Hollywood Hills made defining the micro market for Paseo Plaza a bit tricky, so input from local brokers was crucial. Consequently, by basing it more on demographics and future land use patterns than geography alone, the competitive net extended west and south of Hollywood to capture the type of resident willing to overlook a neighborhood not yet gentrifying but wanting the associated advantages -- such as mass transit, entertainment options, or a short commute -- of urban living.
Most importantly, with two distinct product lines chasing different buyer segments, nearly 400,000 square feet of planned retail space and plenty of security measures, such a large development will undoubtedly create its own ambience and jumpstart surrounding redevelopment efforts by virtue of its size alone -- theories than have already been well documented in practice at both Sunset & Vine and Wilshire & Vermont.