Is Arts District Creative Office a Good Investment?

Aleks Trifunovic is the president of Lee & Associates West L.A. office.

LOS ANGELES—The Downtown renaissance has attracted many, many investors and, in turn, has catapulted pricing to record levels across product types—but not every downtown submarket has hit its stride. In the Arts District, creative office product rivals pricing on the Westside, but the demand for the same product type is lacking. It is a potentially dangerous combination. Should investors take on the risk? We asked creative office expert Aleks Trifunovic, president of Lee & Associates West L.A. office, if he has seen creative office investors heading to the Arts District for opportunities. He says that because of the low tenant demand and the abundance of space, he isn’t recommending it.

“You can buy something in the Arts District for $550 per square foot with no tenant demand, or you can buy something in West L.A. for $550 per square foot with tenant demand,” Trifunovic tells GlobeSt.com. “I love the Arts District and there are great things going on there, but I am telling investors to be careful.” Pricing in the market is $500 to $700 per square foot for a 5,000-square-foot to 10,000-square-foot building and the rental rates hover above $3 per square foot, compared with emerging markets like Culver City, with $3.50 per-square-foot rental rates.