Since the Los Angeles commercial real estate market has recovered from a massive hit from COVID, some areas are booming and others are stuck in a two-year recession. “It’s a two-city thing, depending on which market we’re talking about,” said Jodi Poirier, chief executive of Colliers.
“It’s much quicker to get back to markets that we consider to be key technology and entertainment markets,” said Bill Bladegood, CEO of Newmark. This is good news for established and emerging creative hubs like Culver City, West LA, South Bay and the Arts District. This is bad news for more traditional business districts like downtown and old-fashioned offices that look like an “80s or 90s law firm,” according to JLL CEO Jacqueline Ward.
Overall, the greater Los Angeles commercial area lags behind the rest of the country due to stricter COVID regulations, where 25% of office space is free, according to Colliers’ Q1 2022 report. Before employees return to work, they return fewer days per week, reducing the need for a floor. “We’re seeing companies do more with less space,” says Bloodgood.
Three buildings on the Water’s Edge campus in Playa Vista, located in the Facebook and Google offices in Los Angeles.
Courtesy of Cbre
The pandemic has also accelerated pre-COVID trends, with employers receiving bonuses for creating a comfortable and creative environment for their employees. Heavy, tall offices with cabins appeared. Low-rise brick and wood buildings with abundant natural light, garden space, high ceilings, easy entry and exit and amenities including a gym and dog parks.
A good example of this new style is Hackman Capital Partners 30 acres at 888 Douglas St. Campus in El Segundo, a converted former aerospace factory with 50-foot ceilings and pencils. Another is Water’s Edge Playa Vista, where Nike has taken over an on-campus building that includes an Olympic-sized swimming pool.
“I think more and more companies want to use their office space as a competitive advantage in hiring and creating a culture and environment where their employees want to come back to the office,” said Jeff Peony, vice president of CBRE.
Ward sees the service battle brewing in the context of companies competing with employees. “We have a big waiver on our hands,” he says. “We have a very tight job market and we have a changing work dynamic. “Big companies are fighting for a lot of the same talent.”
Culver City, Amazon Studios and Warner Bros. Discovery’s main entertainment hub is in Los Angeles. It has a large number of very high quality properties in a most modern and important high standard environment. The number of low-growth creative alternatives for consumers,” says Bloodgood.
In fact, with its many large and flexible creative campuses, West LA is coming back at a faster pace than anywhere else in the country. “The Los Angeles Westpad is about 25% of all of Los Angeles,” Ward said. “But the West specifically accounted for 30 percent of all rentals, which we’ve seen in the last three months.”
West LA’s renaissance is due in part to the growing popularity of Century City, which is attractive due to its central location, as well as the presence of the Westfield Century City Mall and the new Fairmont Century Plaza Hotel. In January, CAA announced that it had signed a lease for 2026, when it will become the main tenant of the 37-story tower created by JMB Realty. “It went very well despite the skyscraper environment. “I think it came as a surprise to many,” Pion said.
This is another story in the DTLA highlands, where traditional industries such as banking and financial services have long operated. According to Colliers, the overall downtown vacancy rate is 29.8%, the highest in the Los Angeles office market.
While the pandemic has been devastating for commercial real estate, it can help make the office a more pleasant place to work. “Companies are still interested in how to develop a corporate culture,” Ward said. “Collaboration, connection, whatever that sounds like to you, I find it very difficult to virtually establish a company culture.”
A version of this story first appeared in the June 1 issue of The Gossipify. Click here to subscribe.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
