Don’t Be Fooled, Santa Monica Is Still King of Creative Office
Downtown Los Angeles and Hollywood have gotten some major leases, but when space comes on the market in Santa Monica, office users still line up.
Sure, Hollywood is capturing significant creative office leases, and Downtown Los Angeles is starting to attract more creative tech office users, like Warner Music and Spotify. But, make no mistake, Santa Monica still holds the crown for creative office activity. With little space available, creative office space leases quickly with high competition, and the market continues to see rent growth. Despite the competition, Santa Monica has retained its popularity for creative office users.
“There is nothing that sits on the market for very long,” Bernard Huberman, founder and CEO of BLT Enterprises, tells GlobeSt.com. “As long as it is priced competitively, and I don’t know what the threshold is, people want to be in Santa Monica. The challenge here is really finding contiguous space. Hollywood and Downtown Los Angeles has a lot of projects coming online, so you can find a 20,000-square-foot space or a 10,000-square-foot space. Santa Monica doesn’t have that available—and the vacancy here is nil.”
Typical creative office spaces in Santa Monica are 5,000 to 7,000 square feet, and rents are hitting $6 per square foot. While creative conversions have been popular in the market, there are few opportunities left to retrofit outdated buildings. “It is more and more difficult. Finding the property is the trick,” says Huberman. “There isn’t an availability of these older industrial buildings. We can’t find a portfolio of these types of buildings. We are only finding them here and there. These properties have gone through the roof as far as cost per foot, which is pushing $1,000 per foot for a creative office building.”
BLT Enterprises, however, has still been able to find opportunities. The firm recently completed creative office conversions in Santa Monica, and leased them both quickly. The projects include a 5,000-square-foot property at 1941 Pontius Avenue, which leased to King and Country, and a 27,000-square-foot property at 2231 Barrington Avenue. “We did a complete creative retro-fit. We took the property down to the studs and made it creative office with a kitchen, metal windows, an outdoor metal patio,” says Huberman. “We didn’t build it for a specific tenant, but during the marketing process, we got a lot of interested from digital media companies. We ended up leasing it to King and Country, which is a commercial post-production company.” King and Country was exclusively looking for creative office opportunities in the Santa Monica/West L.A. area.
Because 2231 Barrington Avenue was a larger floor plate, it leased rapidly. “The second building is larger at 27,000 square feet, so it stayed on the market for a very short time,” adds Huberman. “We leased it to a digital media firm, and we are doing the build out now.”