Schools, Retailers Filling Vacant Santa Monica Space In Fire's Aftermath

Where workers once sat with their heads bowed over keyboards, SoCal schoolchildren now toil over reading lessons and math problems.

The tenants may be shorter and more energetic than they used to be, but they’re back at a handful of office parks in Santa Monica that have been co-opted by local school districts that lost structures in the Palisades fire that swept the West Side last month.

Four schools have relocated, including one at the Water Garden, a 1.4M SF office campus owned by JPMorgan at BXP’s 1.2M SF Colorado Center complex. 

“In places where we had vacancy, they're bringing all kinds of new, exciting activations,” City of Santa Monica Economic Development Manager Jennifer Taylor said. “They’re bringing the school energy.” 

Schools in the Palisades were among the first to reach out to the city of Santa Monica’s emergency operations center to see about finding space, Taylor said. 

The school at Colorado Center has subleased 65K SF and brings 270 schoolchildren and 70 teachers on-site five days a week. Taylor said at least one other Palisades school is in talks to move to Santa Monica and is eyeing Colorado Center. 

While the displacement and destruction of school property is a loss for the community, the soft office market offers a place for kids to keep learning while filling available space.

In the final quarter of 2024, Santa Monica’s office vacancy stood at 24.4%, reflecting persistently high office vacancy rates that have plagued markets since 2020.

“We're starting to field calls for all kinds of businesses looking to be here,” Taylor said, either for the short term or for longer. “That’s creating opportunities.”

Retailers whose buildings suffered fire damage are also reentering the market in different spaces, but their needs have changed as they search for a clear view of the future of their businesses.

The build-out of a restaurant could take a year and a half. And with so much uncertainty still swirling around the rebuilding timeframe, many restaurants and similar operators might be trying to find a less time- and money-intensive way to stay in business, according to Kennedy Wilson Brokerage Senior Vice President Christine Deschaine. Some food and beverage operators are opening commissary kitchens to facilitate takeout orders while they plot their next move. 

Sweet Laurel Bakery was on Sunset Boulevard in the Palisades but is now operating out of a walkup window at a commissary space it had on Pico Boulevard. The walk-up service launched in late January, according to the store’s Instagram, and customers can come and pick up online orders or buy individual baked goods.

“I don’t know the future of our cake shop,” the bakery’s co-founder, Clare Thomas, wrote in a Jan. 11 Instagram post. “But I do know our incredible team is busy baking and delivering across LA from our commissary.”

Various city departments have worked to eliminate hurdles so businesses can move in quickly, Taylor said, whether it’s the planning department using the emergency orders declared when fires were raging to remove some zoning challenges or the city waiving outdoor dining license fees so restaurants could expand their operations and offset lost income.

“We’re trying to pivot really quickly,” Taylor said. 

Businesses that relocate to Santa Monica enter a market that is working to find its footing in a post-fire landscape. When the fires caused evacuations, Taylor said many local businesses got a firsthand look at just how much of their customer base was made of people who lived in the evacuated areas, and it was significant. 

“They're not just our neighbors, they’re our customers,” said Andrew Thomas, CEO of Downtown Santa Monica Inc., the business and property owner group that oversees services in downtown Santa Monica. “They know our businesses. They frequent here. They're in downtown, they're on Montana, they're on Main Street.” 

CORRECTION, FEB. 18, 5:01 P.M. PT: A previous version of this story misidentified the status of some office space now occupied at Colorado Center. The story has been updated.