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DTLA sidelines the headlines, strengthens business case for hotels

LOS ANGELES — Headlines for the first nine months of 2025 were challenging for Los Angeles — and Chicago and Boston and Minneapolis and Washington, D.C. and dozens of other cities throughout the country. From natural disasters to regulatory enforcement and municipal politics, any given day in any given location can make hotel investors think twice about where they can safely deploy capital.

That uncertainty is changing the checklist of development incentives. Although hotels are a long-term play, investors are looking to cities to show they can respond quickly to negative news and put the focus back on the menu of business and tourism drivers that will maximize rate, occupancy and ROI for the life of the asset.

In this exclusive interview, Hotel Investment Today talked with Nella McOsker, President & CEO, Central City Association (CCA) of Los Angeles, about how DTLA achieved a reality check after a rough beginning to 2025. She delves into the combination of contingency planning  and nimbleness that shifted attention back to ongoing initiatives that leverage current opportunities She offers a detailed look at DTLA's future and the action plans to realize the rich residential-cultural-business-tourism hub that will be the city center of 2040.

Hotel Investment Today (HIT): The first half of 2025 was challenging for Los Angeles. People who only saw the headlines may have thought the city was beleaguered on multiple fronts. What was the reality and how did you address misperceptions?

Nella McOsker: The first half of 2025 included several high-profile events — regional wildfires, public debate over minimum wage policy, and a temporary National Guard deployment tied to specific incidents. But those moments do not define Los Angeles. City agencies, business and tourism leaders, and community partners responded quickly with coordinated relief, outreach, and communications to support residents, protect workers and small businesses, and reassure visitors, keeping Los Angeles open and economically active. Initiatives like Dine LA, a citywide event supported by local partners, encouraged patrons to continue dining in Downtown restaurants, supporting local businesses and keeping the area lively and economically active.

HIT: How do the goals of the DTLA 2040 Community Plan adopted in December, 2024 increase the appeal and profit potential of investing in hotels for the area?

McOsker: Downtown Los Angeles is growing as a hub where people live, work, and visit, creating a dynamic mix of residents, employees, and visitors. That mix drives steady demand for hotel rooms throughout the year, supports higher occupancy rates, and strengthens revenue potential, making hotel investment in the city center an attractive opportunity for those thinking long term.

We’re actively pushing policies that spur investment, strengthen public safety, and facilitate strategic partnerships—because Downtown needs to be both safe and predictable for businesses to thrive.

Nella McOsker

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HIT: How will the dynamic expansion of housing options help build business opportunities for hotels and bolster DTLA’s economic base?

McOsker: The growth of housing in Downtown strengthens both the local economy and the hotel market. DTLA is home to a permanent population of roughly 90,000 residents, while its daytime population of workers and visitors swells to 400,000, making it the county’s second-largest “city.” Expanding housing adds more residents who support restaurants, retail, and cultural amenities, making neighborhoods more attractive to visitors. As companies in tech, bioscience, advertising, and new media follow their workers downtown, hotels benefit from increased business travel, client meetings, and relocation stays.

HIT: How does the pressure to repurpose so much vacant office space create opportunities for hotel development? How does that affect development/construction costs and schedules?

McOsker: The abundance of vacant office space in Downtown Los Angeles presents a unique opportunity for adaptive reuse, including potential hotel development. Many office buildings have floorplates, locations, and infrastructure that could support hospitality uses, though conversions must meet building codes, accessibility, and seismic standards, which can affect costs and timelines. To help unlock this potential, CCA is convening a working group of Downtown stakeholders to define incentive-driven strategies that could reduce financial and logistical barriers. These efforts aim to activate underused buildings, expand hotel and residential capacity, and bring new energy to Downtown neighborhoods.

HIT: How are you attracting businesses to DTLA, and how are you supporting the existing hotel and business community?

McOsker: We’re actively pushing policies that spur investment, strengthen public safety, and facilitate strategic partnerships — because Downtown needs to be both safe and predictable for businesses to thrive. CCA is set to launch a Rapid Economic Recovery Action Plan focused on three immediate priorities: enhancing safety, improving cleanliness, and activating public spaces. By making Downtown more inviting and accessible, these efforts help existing businesses thrive and encourage new investment to locate here.

At the same time, Downtown’s commercial districts — like the Jewelry, Fashion, Flower and Produce Districts — along with a strong tourism sector, are essential economic drivers. We’re supporting that ecosystem through policy initiatives that encourage new hotels, strengthen the convention center, and activate Downtown as a destination for visitors and businesses alike.

HIT: What impact will the improvements in the transit system have for hotel development in and around DTLA?

McOsker: Improvements in transit are making more parts of Downtown accessible and attractive for hotels, helping both guests and employees get around easily. As connectivity expands, locations that were once overlooked are now seeing renewed interest from developers. We’re also looking at options to make DTLA more accessible to pedestrians and cyclists. For investors, the key takeaway is that better transit and a more connected city center support hotel demand, enhance occupancy potential, and make long-term investments more predictable.

HIT:Cities around the country have come under fire for not being “business friendly.” Part of your mission is to advocate for an environment where businesses and institutions can thrive. What’s on your agenda?

McOsker: Our focus is on creating a predictable, supportive environment for businesses and institutions in the city of Los Angeles. That means advocating for clear and efficient permitting, practical development incentives, and policies that encourage adaptive reuse and investment. We’re also prioritizing public safety, reliable transit, and a vibrant public realm — all elements that help businesses thrive and make the city a more attractive place for employees, residents, and visitors alike.

The abundance of vacant office space in Downtown Los Angeles presents a unique opportunity for adaptive reuse, including potential hotel development.

Nella McOsker

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HIT:What other initiatives or infrastructural enhancements should give investors and developers confidence in the downtown's long-term growth?

McOsker: Investors and developers can be confident in downtown’s long-term growth because the city is actively improving the infrastructure and environment that support business. Transit upgrades and expansions, public safety initiatives, and programs that streamline development and adaptive reuse all reduce operational risk, making projects more feasible and attractive.

HIT:How will lessons learned from this year’s experiences speed recovery going forward?

McOsker: This year’s challenges showed the city that coordinated planning, rapid response, and strong partnerships across public and private sectors are critical. We’re applying these lessons by encouraging updated emergency response protocols, investing in infrastructure resilience, and creating flexible plans that allow both city agencies and businesses to respond quickly to future events. The goal is to ensure Downtown remains safe, operational, and ready for residents, visitors, and investors under any circumstances.

HIT: Describe the Downtown of 2040.

McOsker: The Downtown of 2040 will be a thriving, mixed-use urban center where people live, work, study, and visit. Over the next two decades, it is projected to welcome roughly 125,000 new residents, 70,000 housing units, and 55,000 jobs, making it one of the fastest-growing areas in Los Angeles. Streets will be active and walkable, with a diverse mix of housing, offices, cultural institutions, and green spaces. Adaptive reuse of existing buildings and strategic new development will balance historic preservation with modernization, while transit and public infrastructure upgrades enhance connectivity. By 2040, Downtown will be a safer, greener, and more economically resilient city center that supports both its permanent and daytime populations.

HIT: If you could share one key message with the hotel investment community, what would it be?

McOsker: Downtown Los Angeles is a vibrant, year-round destination where residents, workers, and visitors converge. Visitors are drawn to world-class venues like LA Live, Crypto.com Arena, the Broad Museum, the Music Center, the Walt Disney Concert Hall, among others, while surrounding neighborhoods such as the Fashion District, Historic Core, Chinatown, and Little Tokyo provide unique cultural, dining, and shopping experiences—not to mention Dodger games and an array of other sporting events. For hotel investors, this translates to consistent demand, strong revenue potential, and long-term growth opportunities. The key message is clear: now is the time to invest in a city center that is increasingly connected, active, and resilient.

Mary Scoviak is custom & design content director, Hotel Investment Today by Northstar.

The views and opinions expressed in this content do not necessarily reflect the opinions of Hotel Investment Today by Northstar or Northstar Travel Group and its affiliated companies.