Legendary Group Unveils 17-Story Spec Office Space In The Arts District
Los Angeles-based Legendary Group is planning to build a 17-story speculative office project in the Arts District, and it could begin construction as soon as next year.
This project was originally proposed in 2017 as a smaller development, just 11 stories, but evolved after community and city input, Legendary Group partner Dilip Bhavnani told Bisnow. The project is owned and entitled by Legendary, which completed the Aliso apartment complex with partner Brookfield Residential in 2019.
The development is planned as 311K SF of office space and 22K SF of ground-floor production and retail space.
"A lot of the city is seeing an increase in [office] vacancies, but we're seeing the absolute opposite in the Arts District," Bhavnani said.
It's hard to see how well the neighborhood is doing, as it is not its own submarket and is mostly lumped in with Downtown in market reports. Citywide, office vacancy is at 21.2%, according to a Q1 2022 report from Cushman & Wakefield. The first quarter of this year was the eighth in a row where occupancy dropped.
Bhavani said the planned start date for construction doesn't depend on having a certain amount of tenants lined up.
"Our plan is to start even if nothing is pre-leased," he said.
How much office space companies will need in the future is still an open question. Los Angeles was at 40.4% actual office usage the week of May 18, a drop from the week before and below the national average of 43.4%, according to Kastle Systems’ Back to Work Barometer.
But a release from Cushman & Wakefield, which has been retained to do the leasing of the project, notes that the team of Mike Condon Jr., Brittany Winn, McKenna Gaskill, Pete Collins and Scott Menkus has seen 4M SF of new inquiries over the last 12 months for space in the Arts District. In Q1 2022, the team received almost 800K SF in tenant inquiries, Gaskill said in a statement.
"We lease product from the beach to the LA River and, in our experience, it's the most active submarket right now," Cushman & Wakefield Vice Chairman Mike Condon Jr. told Bisnow.
The building will have 12 floors of office space and seven levels of parking, with three underground and four above ground. Bhavnani and Condon both underscored the importance of parking and its attractiveness to tenants and their employees. It will also have high clear heights, which makes the space more versatile for a wider array of uses, including media production. Soundstages are planned at a project on Sixth and Alameda and south of the Arts District at a former Los Angeles Times printing plant.
There is a fair amount of new office space in the works for the Arts District. Hines is planning a 450K SF office space south of Seventh Street and Santa Fe Avenue, Urbanize has reported. Onni Group is planning 187K SF as part of a development that will include a 36-story tower, and Tishman Speyer is working on a roughly 200K SF riverside project south of Seventh Street.
