Downtown Los Angeles is undergoing a renaissance as progressive investors convert long-forgotten warehouses into creative office and mixed-use space. This wave of change is attracting creative tenants, while more traditional users move to infill markets.
The submarket has a rich industrial history that includes some of the most iconic American brands. Now, forward-thinking owners are repositioning these prior manufacturing sites to capitalize on tech and creative user demand for this type of space. Several recent transactions illustrate how L.A.’s ex-industrial buildings are catering to new market realities:
- In the Arts District, the former Ford manufacturing site sold to Shorenstein Company for $35 million in May 2014. The developer said they’ll open the site to creative office and retail tenants upon completion.
- A Coca-Cola bottling facility at 4th and Traction, which sold for $19 million last spring, is being converted to mixed-used space and creative office. In addition to fostering the new downtown L.A. vibe, the flagship space will provide a much-needed parking lot.
- Professional designers converted an industrial building into a wellness center; now The Springs allows Angelenos to relax at a café, take a yoga class, or indulge in a spa treatment.
- On the same street as The Springs, locals frequent Urban Radish, a warehouse-turned-hip-grocer.
- A former Jewelry District building recently traded hands to developer Urban Blox. A site once lined with diamond and gold kiosks will become creative office space and retail.
- Just across the L.A. River, the historic Sears distribution center also has plans for creative office conversion. The eight-story marvel is visible from all eastern points of Los Angeles and sold to local investor Izek Shomof. Renovation has already begun for this local landmark, and in addition to office, the site will boast housing, ground retail, and a rooftop restaurant.
Undoubtedly, these newly polished buildings have attracted a modern pool of lessees, and many artists, entertainment professionals and adventurous entrepreneurs have arrived on the doorsteps of these brick-exterior, bow-and-truss interior spaces. Their presence has added immense value to the downtown corridor, and the streets have become better landscaped and groomed as of late.
However, with this, the area has observed hiked rental rates. Traditional users have thus slowly but surely trickled down to the central markets, to adjacent cities like Vernon and Commerce. Although rental and sales asking prices have increased for this region as well, they’ve still stayed relatively more stable compared to those in downtown L.A. and adjacent L.A. River areas.
Overall, it’s safe to say the downtown L.A. market is finally at its happy prime. There are some beautiful projects injecting life into a neglected area, once solely reserved for industrial and manufacturing use. It all started with a few local artists’ visions, and we’ve only witnessed just the early beginnings of what’s to come for this West Coast Meatpacking District.
For additional info, visit www.industrialR-Evolution.com.