Most of the construction in Los Angeles is occurring downtown, but it isn't all new construction. After the initial wave of adaptive reuse multifamily projects, which in many ways acted as a catalyst for the Downtown renaissance, the new trend is the renovation of historic office properties. Several creative-style office redevelopment projects are under construction, and will deliver in the next two years to create a healthy stock of creative product.

“Most of the construction occurring in L.A. County is occurring in Downtown Los Angeles, and it isn't all new construction, like the Korean Air Tower,” Nico M. Vilgiate, EVP at Colliers International, tells GlobeSt.com. “It is repositioning older product, like the Harold Examiner Building or the L.A. Times Building. The historic buildings along Broadway that were mothballed have been popular for redevelopment. That is the type of real estate, the type of bricks-and-mortar, a lot of companies are looking for as opposed to your typical class-A high rise.”

Vilgiate lists 801 Broadway, Brunswick Square and the Coca-Cola Building in the Arts District as the most anticipated of these historic redevelopments, and a good example of the type of office product that is attracting tenants today and driving demand. “That type of real estate is highly sought-after by today's tenancy,” he says, adding that the high vacancy in the downtown market is due to the fact that tenants are waiting for the completion of these spaces. “Some of the product hasn't completed their renovations, and tenants need to see the end result before they sign a lease. Most companies in the 20,000 to 40,000 square foot range are going to be more patient because there are more options in that size range of all different types of product.”

In general, the renovation of these buildings also adds to the appeal of the Downtown market, which has a lot going for it, from new development to public transit and walkability to a robust job center. “We have the Korean Air Tower, which is magnificent, and other new product, like the Metropolis and the projects across from the Staples Center, and the new L.A. soccer stadium,” says Vilgiate. “There are so many things that are happening downtown, and people are going to continue to want to be apart of it. It is going ultimately successful.”

In addition to the new office product as a potential catalyst for office growth, the market also has the potential to grow its infrastructure in the near future. “Downtown is the most convenient place in Los Angeles for both public transit and highways,” says Vilgiate. “One thing that is going to help even more is the potential for the future summer Olympics. That could be a catalyst to expand rail and to upgrade infrastructure.”

Instant Insights /

The Allure of Historic Office Redevelopment

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