The Case For Downtown's High-Rises
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At Bisnow's Creative Office Summit, our moderator, Allen Matkins partner Pete Roth, voiced the question on everyone's mind (no, not when is Justin Bieber going back to Canada): Why are we holding a creative office program in a Downtown LA hotel?
Pete, right, says the answer is that creative office is evolving; we're seeing sectors that wouldn't be considered creative but have collaborative needs. That's what the high-rise creative office is about—a tenant, not necessarily a traditional creative user, adapting creative elements into the workspace with transportation and the amenities of a CBD. Some 285 attended the event at the JW Marriott at LA Live.
Howard Building Corp CEO Paul McGunnigle (with Pete and Tangram Studio's Charlotte Wiederholt) thinks creative office can go vertical every bit as easily as horizontal. (Especially if everyone just tilts their head sideways.) Paul first built out the top of 400 S Hope in 1985 for IBM, but after the company left, the space languished. "Nobody understood how to use that space, because it was originally designed to be a restaurant." Now it is CBRE's new high-tech HQ. He says the same could happen at any building on Bunker Hill.
CBRE SVP John Zanetos says Downtown's high-rises could set the tone for creative tenants, noting the culture and identity of a building start "within the first 30 feet of the project." Howard Stern sees it happening here in pockets, but notes that unlike San Francisco where creatives need to be downtown, LA has too many options. "People would rather go to El Segundo" and create their own vibe. Cross Campus CEO Ronen Olshansky says the company's being recruited by landlords because they view collaborative workspace as an "unbelievable amenity. It's the social club of the building."
With hiring the biggest challenge to a young company or a Google, Ronen says companies like Downtown LA because it's at the crossroads of public transit. Kilroy Realty director of development Jamas Gwilliam says the company's not in Downtown yet but watching how things shake out. That said, you have to be realistic in terms of how much tenants can pay in rent. (Charge more if your tenant specializes in Wolf of Wall Street re-enactments.)
We couldn't put on great events without our sponsors like Cassidy Turley. We snapped Arty Maharajh, Jake Hunter, and Doug Scott before the program.
FLUX Branding's Jamie Schwartzman (right) says the firm is working with Arenda Capital on a creative office project called Brunswig Square. It's a classic art deco building at 360 E Second in Little Tokyo, an up and coming area across from the Arts District. The building was recently demoed out; marketing starts in the next few weeks.
El Segundo planning and building safety director Sam Lee (with city manager Greg Carpenter and economic development analyst Ted Shove) tells us there's 1.5M SF of new creative office space that's being worked on in the city. Supporting that office space will be new retail and restaurant space at the corner of Sepulveda and Rosecrans with The Point.
Lone Oak Fund's Alexa Mizrahi (right) says the firm recently closed a financing for a Downtown LA industrial building that's being converted into creative office space. The firm, which specializes in quick financing, is seeing a transition from multifamily into other property types. Other recent deals include an acquisition loan for an office building on Ivar in Hollywood as well as some hotel loans.
We also snapped Premier Cabling Solutions' Manuel Cano and John Paul.