Fashion Companies Seeking Office Space Are Flocking To DTLA
Downtown Los Angeles is weathering one of its slowest office leasing environments in history, but a spate of new tenants in the fashion industry is on the hunt for space.
The latest and largest is Finesse, a startup that uses artificial intelligence and online surveys to determine what clothes its fans want to buy. Finesse subleased 23K SF of office space in The Bloc LA, a mixed-use property renovated in 2016.
Finesse was already in Downtown, with about 5K SF on Main Street, Found Real Estate principal Matt McLaughlin said. McLaughlin and fellow Found Real Estate principal Doug Fillmore represented Finesse in the lease.
But as Finesse looked to expand, it zeroed in on a couple of attributes it felt were critical for its next office.
“It's heavily amenitized and it’s also safe,” which was important for a company with predominantly female employees, McLaughlin said of The Bloc.
“At The Bloc, there's 24/7 security, there's property management on-site, parking connects to the building as well as public transit,” he said. “All those factors really weighed into this being the right space.”
Finesse was initially open to anywhere in the LA metro, as long as the property was right. But Downtown's ease of access for the company's many employees commuting from east of Downtown and Northeast LA was a selling point, McLaughlin said.
Those markets east of Downtown are growing, as residential hubs and Class-A creative office space is in short supply, which is likely to create “a really cool spillover effect into [Downtown] buildings, and I think we were headed in that direction prior to Covid,” McLaughlin said.
He said Downtown's history and architecture are a draw for creative companies like the fashion-focused clients he is working with.
Fillmore and McLaughlin are working with two other fashion companies that are looking for between 6K SF and 20K SF in Downtown LA. The larger tenant is looking for a flex space that will blend some office and mostly industrial space to accommodate the company's garment business.
Fashion tenants have long been a mainstay of the Downtown market, but they have historically concentrated near the Fashion District. Adidas signed a 100K SF lease at the neighborhood’s California Market Center in 2022.
Elsewhere in Los Angeles, fashion company L'Agence signed a long-term lease with Jamison to occupy 21K SF at 4201 Wilshire Blvd. in Park Mile.
The Bloc features Alamo Drafthouse, restaurants, Uniqlo, a Macy’s and Sheraton Grand Los Angeles, in addition to roughly 730K SF of office space. It sits above and connects to the Seventh Street/Metro Center rail station. The property is owned by National Real Estate Advisors.
Financial details of Finesse’s lease were unclear, but McLaughlin and Fillmore said its sublease will go until mid-January 2028.
In the third quarter, the Los Angeles office market saw 3.8M SF leased, its highest quarterly total since Q1 2020’s 4M SF, according to a Savills report. However, availability is also on the rise, reaching 28.3% in Q3. Available sublease space marketwide rose from 10.8M SF in Q2 to 11M SF in Q3.
