Downtown LA's Big Transformation
Among the hottest topics in LA commercial real estate is the revitalization of Downtown. Once a no man's land, the submarket is flooded with cranes and renewed energy. BOMA's general session this morning was anchored by a panel of some of the biggest players in Downtown. Here's what they had to say.
Brookfield's Bert Dezzutti (center, snapped here with Rising Realty Partners' Marc Gittleman and Shorenstein's Russell Cooper) may know more about Downtown than any other landlord, seeing as how his firm has some 8.7M SF of commercial space in the submarket—by far the largest of any single entity. Bert says there's still a lot of transforming to do, potentially including dog-friendly skyscrapers and continuing to attract more creative tenants. In fact, he says Brookfield is close to announcing a major "nontraditional tenant that will surprise people." Rising Realty is most known in the market for its stunning repositioning of the PacMutual campus. Originally built in 1908 with additions in 1921 and 1926, PacMutual is the oldest property in SoCal to be LEED Platinum certified. Marc says the building is a perfect example of the diversity in Downtown. Its two largest tenants: NastyGal and American Business Bank.
Marc says when Rising picked up the building, its last lease was done at about $1.80/SF. Today, rents start at $4/SF. But it's not all about bringing in the creative tenants. Shorenstein, which has two major projects in the submarket, is focused on entirely different plays. The company picked up the 62-story Aon Center in October, where Russell says it's still mostly conventional office users—think lawyers and accountants. Also in Downtown, Shorenstein is hard at work on its repositioning of the old Ford Factory in the Toy District. The company is converting the 1913 building into a creative office where Russell expects to draw from tenants that would classically only consider the Westside.
The panel was moderated by Hal Bastian of Hal Bastian Inc (here with AC Martin's Robert Newsom and Marc). Hal, who calls himself Downtown's biggest salesman, says one of the biggest changes in Downtown was attracting grocers back to the market. It had been years since a full-service grocery was around for locals, but Downtown now has a Ralph's, which he says does brisk business, and residents are awaiting the highly anticipated opening of a Whole Foods in November. Still, there are hurdles, and Robert, who's company designed much of the Downtown skyline, says regulatory approvals remain a challenge. Nonetheless, he expects big growth in Downtown.
