Playa Vista, Part 2
With Phase 2 underway, there's no disputing that Playa Vista is trending, as amply demonstrated at Bisnow's Silicon Beach: The Rise of Playa Vista event. Our developers and brokers panel featured some of Playa's top players. Videos courtesy of Allen Matkins.
Tishman Speyer's SoCal leasing director John Ollen describes the company's latest project as a stick-built, ground-up creative office complex--five low-rise buildings at 40k SF a pop, totaling 200k SF. John, who's been involved at Playa Vista since 2006, says it's had a slow start with some stops along the way. (It's how you build character and lung capacity.) Going forward, though, he sees momentum and a high retention rate when leases roll. Video.
Lincoln Property hosted our event at its Latitude 34 redo. SVP of marketing Kent Handleman says the conventional wisdom was that Playa Vista was lower Westside, but the commute times from points north or east to here or Santa Monica are virtually a wash. (We're all going 3 mph on the highway, might as well enjoy the destination.) Meanwhile, the 111-acre second phase, including the Link park and his company's own Runway project--make a huge difference to a user debating whether to come down here. Video.
Discussing the Ratkovich Co's repurposing of the historic Howard Hughes buildings at the Hercules campus, development manager Milan Ratkovich says the company performed the physical restoration and brought infrastructure from the streets into the buildings. The developer then was fortunate to have tenants say "We'll take it from here," each spending $100 to $500/SF above their TI allowances to fit out their space. (Those are called fairy tale clients.) Video.
Cresa principal Dave Toomey cites two categories of Playa Vista tenants: big-budgeted corporate firms, and fast-growing emerging market firms that want to spend their money on software engineers and developers, not their space. To go to the next level without a big budget, the latter are looking for the type of deals Dave did with the Fox subleases--space that's built, wired, and ready for occupancy with a TI allowance from the sub-landlord, making for a near zero cost move. Video.
According to Avison Young principal Randy Starr, client RPA is kicking the tires again down here. Playa Vista's a micro-city that has it all, he says: amenities, mixed-demographic housing that hits all of a 400-employee company's echelon levels, parks, and a shuttle system, all of which help it compete with Santa Monica. Having incubator space to house small, growing tenants puts them in the area and lines them up to do larger deals in Playa in the future. Video.
Our moderator, Allen Matkins partner Peter Roth, has done deals up and down the coast including the big Transbay Tower site in San Fran for Boston Properties. But the question that the Westchester resident, who worked on the Runway center leasing, gets asked by his neighbors more than any other project: When is Whole Foods opening?
Based on number of comments, one of the stars on the panel (though it didn't have much to say) was this dirt pit where Tishman Speyer plans its creative project. John would love to build the same thing on an additional Playa Vista site, but you'd leave entitlements on the table so you have to go up. But by then, the inertia will be such that companies will take a look at Playa regardless.
Kent plans to build out a spec suite floor divisible to 5k to 10k SF. Putting tech firms into Playa, some practical issues Dave runs into involve higher densities than the buildings were designed to house. In many cases, women’s restroom stalls outnumber men’s, but these companies have 90% men. (Is that why there's always a line?) Milan notes all the tenants at Hercules have a cafe or cafeteria, including one with four beers on tap plus red and white wine bars.
We couldn't put on events like this without great sponsors. According to Paul Smith of Tangram, which provided our panels' comfy chairs, the company tries to take a creative approach to interior solutions and be more than a furniture provider. Reasons he loves Bisnow: our loud music, exciting atmosphere, and networking. Nametag provider Mission Capital Advisors' Gregg Applefield says the firm is actively financing properties on the West Coast, expanding its debt placement and JV equity structured finance business.