Pasadena Next Up for Office Renaissance
Office redevelopment has helped to transform L.A. submarkets from West L.A. to Culver City to Hollywood, and Pasadena is next.
“The Pasadena market will continue to tighten in 2019 as large blocks of space have dwindled in Pasadena and surrounding areas,” Patrick Church, managing director at JLL, tells GlobeSt.com. “Because of the large tech boom in LA County, which has caused minimal supply in Silicon Beach and West L.A., markets like Pasadena will see increased movement and tenant velocity.”
Landlords are completing major capital investments to attract these new tenants in the market. Among the projects to undergo a facelift are the 345,000-square-foot 101 S. Marengo, formerly the Bank AmeriCard Plaza, which Woodridge Capital Partners will transform into a more creative-style or progressive office space with windows; a Paseo Colorado project, which is converting certain retail spaces into creative office and will provide for a true live/work/play environment; a ground-up project under construction at 10 West Walnut, which will be 200,000 square feet with office, retail and multifamily. “The vision for all redevelopment is a combination of retail/office use with tenant amenities in and around the projects,” says Church. “Coretrust will embark on a complete renovation and repositioning of Corporate Center Pasadena in 2019, which will create the most unique environment in Pasadena where indoor office space bleeds into outdoor office space and collaboration areas.”
While the new tenant migration has been the catalyst for these redevelopment projects, the increasing presence of millennial workers have informed the trend toward creative office. “The large millennial workforce, talent attraction and employee retention are driving the shift to creative, full-service and amenity based office product,” says Church. “In order to attract the best talent in a highly skilled labor base, companies need to provide employees with plentiful walkable amenities, outdoor space and creative but sophisticated work environments.”
This year, this redevelopment activity along with strong tenant demand has the potential to drive major changes in the Pasadena market. “The redevelopment in Pasadena will drive both tenant momentum from outside Pasadena and inside Pasadena,” says Church. “As large tech tenants look to increase their footprint and presence in the market, large blocks of space will be extremely hard to find and the lack of supply will drive rents. After spending tremendous amounts of capital to create these redevelopments and ideal work environments, rates will increase steadily.”