May 20, 2019
June 3, 2019
Millennials Are Driving The Creative Industrial Trend
Millennials and employers looking to attract this new generation of workers with an authentic office space are driving the demand for creative industrial products in Los Angeles, respondents said in a recent Bisnow survey.
Respondents believed the trend of transforming small and midsize warehouse buildings into hip creative offices will continue to thrive.
"This is not a fad," one respondent said.
The creative industrial trend has been happening for at least the past decade.
Many former warehouses that once were occupied by air conditioning companies and small manufacturers have been converted into hip office campuses with high, exposed ceilings, polished floors, exposed bricks, collaborative indoor and outdoor areas and murals.
Shoe company Toms' headquarters in Playa Vista is an example, along with Google's recent transformation of the Spruce Goose, also in Playa Vista.
The conversions of these buildings, which range from 10K SF to 400K SF, has led to high demand.
Nearly 80% of respondents said sales prices and lease rates have gone up for industrial buildings, especially in LA's infill markets. More than 60% said the cost of these creative office conversions are higher than building traditional big-box industrial products.
"By creating a sense of community and by creating desirable spaces that helps industrial users attract and retain talent, I have found that industrial tenants will pay higher lease rates for industrial properties with amenities," a respondent said.
But some survey participants are not entirely sold on the creative industrial concept. With so many companies looking to ditch traditional office space for a creative industrial product, the concept has become dated, they said.
"I'm hoping for something new to come along soon," one said. "The creative office look has become a bit too common now. It also causes contractors to be sloppy in their work thinking it doesn't really matter."
The term "creative office" was really just "creative industrial" from the get-go, another respondent said.
When it comes down to it, many of those surveyed agreed that the creative industrial trend is not going away soon.
"It's a great way to take a big, boring box and make it something compelling and unique," one said.