Adidas Inks 100K SF Lease At DTLA’s California Market Center Following $250M Repositioning
Shortly after unveiling the repositioned California Market Center, Brookfield Properties has secured a big-name tenant for the Fashion District creative office property.
Adidas AG has signed a 107K SF lease at the complex with plans to “initially” occupy the top two floors of two buildings at the three-building property, Brookfield Properties Executive Vice President of the Western Region Bert Dezzutti said in a statement.
The German shoe and apparel company’s lease was inked late last year, according to a Q4 2021 report from Savills. The Wall Street Journal reported that the lease was “a major expansion of Adidas’s Los Angeles operation for marketing, sales and design," noting that the company had a smaller office footprint in Downtown prior. Adidas leased about 30K SF in The Row DTLA in 2017, but the firm's total LA footprint prior to last month's deal is unclear.
Representatives for Adidas didn't respond to requests for comment.
The deal is Downtown’s largest lease in more than a year, according to the WSJ. It has been a rough road for the region's office market since the onset of the coronavirus pandemic. A year-end report from Newmark puts Downtown’s total vacancy rate for the last quarter of 2021 at 21.6%, above the 19.6% average for the LA market. As other submarkets — Burbank and Culver City, for example — have benefited from surges in demand for digital entertainment, Downtown’s offices haven’t yet boomed back.
Brookfield bought a controlling interest in the California Market Center in 2017, when it was mainly occupied by fashion tenants and showrooms. Due to changes in demand for showrooms and in the fashion retail business, there was a fair amount of unoccupied space, the Los Angeles Times reported. Brookfield spent more than $250M on the property with the goal of attracting tenants beyond those in the fashion industry and sees the new lease as a sign of things to come.
“For over 50 years, CMC has served as a historic cornerstone for L.A.’s most forward-thinking entrepreneurs in the fashion industry,” Dezzutti said in a statement. “Now, the new CMC has been reimagined to appeal not just to fashion-focused commerce but also to creatives from the technology, entertainment and media industries.”
Adidas was represented by Colliers Executive Vice President Terence Kirk and Vice President Kyle Stanich in the lease transaction. CBRE’s John Zanetos, Rob Waller and Patrick Amos represented Brookfield, along with in-house representation by John Barganski and Ian Gilbert.