The 2001 LA Times article, “More Westside Office Space Turns Up in Latest Tally,” discusses a study in 2001 by Grubb & Ellis that showed a significant underestimated supply of Westside office space due to creative office conversions.
Warehouse conversions to creative office space are small and numerous, making it extremely difficult to track. Likewise, supply statisticians may also underestimate the supply of creative office space. Conventional office space can be converted to creative office space for $50 to $80 per square foot in two to eight months by opening ceilings, exposing the structural architecture, and installing creative office features. Because it is so easy for traditional office space to be converted into a creative office, the supply of creative office space can expand rapidly.
In Los Angeles, brokers call these spaces “soft creative” because they lack the full intrinsic drama of single level converted warehouses but can still provide the creative purpose for certain companies. Currently, in San Francisco, owners are working feverishly to convert conventional offices as well as older moth ball buildings into creative spaces and vacant land into new highrise creative properties.
When it comes to creative space production, we are all “Houstons”. The last time around, the real estate investment and leasing community failed to accurately account for the full amount of creative office space. The industry needs to count the supply more accurately this time and hope the demand increases and sustains with equal fervor.