I have written in the past about the limited solutions LA creative office workers will accept for parking.  LA creative office workers, unlike their San Francisco/Silicon Valley counterparts, don’t like walking or transit.  LA creative office workers want convenient parking, and if not, valet.  New services are forming that will provide valet parking with cars stored in more remote locations.  Perhaps the new app Luxe and its counterparts can be adopted to accommodate creative office workers.

Luxe Valet App Eliminates the Headache of Finding a Parking Spot – NYTimes.com.

New Media Company’s creative offices at the Digital Bungalows

PMI leased a 3800 square foot suite to a new media firm at its Digital Bungalows in Santa Monica. The company produces high quality videos of exercise classes with top instructors in a variety not found on free sources. The videos are available by monthly membership to be viewed on any internet connected devise.

New media companies have fueled the growth of office absorption in Santa Monica and the Westside. This is one example of that trend.

Last week, the Real Estate Investment Advisers held a panel on investment trends. Everyone was complaining of the intense competition for properties driving down yields. One strategy discussed was to seek properties in secondary markets. Some investors sought properties in the best secondary locations to make up for the yield compression. However, unlike previous expansions, more investors are now seeking to move up the risk curve in new construction in prime markets. These investors claim that when the market turns down, these markets will suffer less or return much faster than secondary markets.

Original Force 3D Animation, aChinese animation firm, has leased from an 8,000 square foot creative office with PMI.  Located at 8671 Hayden Place in the Hayden Tract, Culver City is again adding another creative tenant to the ranks.

Established in 1999, Original Force provides professional animation and 3D services for feature films, television, and computer games on a multitude of platforms.  Original Force has became long-term partners and master vendors of Microsoft, Sony, EA, Disney, Tencent, SNDA, and Netease.

David Wilson and James Wilson of Lee and Associates represented both sides in consummating a five year lease.

There has been a lot of activity between the United States. and China in the entertainment realm. American entertainment companies are benefiting by featuring their talents and productions in China.  Some pundits have speculated that China could be as significant a revenue source as the United States.  Likewise, Chinese entertainment companies are starting to enter the United States.

The momentum for Chinese investment in the United States remains strong: Chinese companies spent $2.1 billion in the second quarter on investments here in the States, with more than $10 billion worth of deals currently pending.

In this case, the Culver City office market benefited from the global interaction.

I attended the LACRA Capital Market Conference and he Market Insight Conference last week.  Here are some takeaways.

Asian and Chinese money is prolific and buying up trophy and other commercial properties.  These buyers are in for the long haul and use low to no leverage.

Value add loans on 50% occupied large commercial properties carry a rate of 3.5 to 4% interest only, while long term 10 year debt can be locked in at 4 to 4.5% interest rates.

Overall the Los Angeles office market made little progress with vacancies staying flat, while specific markets are surging.  Hot markets include the Westside, but also El Segundo has begun to surge due to the growth of local tech companies.  In specific sub-markets,  brokers are now talking about rent spikes.  Even before this expansion develops, one broker frets that the good times may not last.  Downtown holds a lot of promise but tech growth has not yet materialized.

Media, tech, advertising, and other creative industries continue to drive the Los Angeles office market recovery.  Prosperity is coming to markets with histories of these tenancies.  El Segundo, for example, is  fraught with bright talent from  aerospace .  On the Westside– media, tech, and entertainment talent drives the growth. in those markets. Hollywood prospers from its long history with film and music companies.  Fashion, art, and architecture will drive Downtown’s office market resurgence.

PMI did a focus group with its millennial workforce to further its research in how to best design apartments for the young tech workforce who may have roommates.  PMI is under production with a four bedroom apartment designed for roommates in Silver Lake. The five main take away critiques and improvements from PMI’s millennials are outlined below.

1. Neat versus messy. A big problem is who does what chores and when. It is the old Odd Fellow problem. Oscar may not mind the unit being messy with the plates unwashed, while Felix may want the unit always to be neat. One solution to this would be mandatory maid service once a week and incorporate the cost in the rent.  Most likely, landlords will just let roommates continue to settle this issue among themselves.

2. Whose stuff is in the refrigerator? Roommates have food storage problems.  Whether it be in a designated cabinet or shelf in the refrigerator, this is a hot button topic.  Clear boundaries need to be expressed, because food can become a health issue if not taken care of.  Sometimes, a roommate may borrow some food without asking, leave their food in the refrigerator past the expiration date, or carry their mess into the refrigerator.  Sharing space in a refrigerator can be a tricky situation, which is why Millennials expressed a desire for separate refrigerators.

3. Whose bathroom is the guest bathroom? Why is my roommate in the bathroom exactly when I need it?   It’s just a simple fact – someone’s bathroom is going to be used by guests when they come over.  In most instances, it will be the bathroom that is separate from the bedroom.   Because roommates share bathrooms, there are potential scheduling conflicts that arise as well.  To avoid these scheduling conflicts, roommates may have to coordinate with each other in the mornings before work or school.  There also might be some competition in who will wake up first in order to get first access to the bathroom.  To avoid this headache, PMI is designing its four bedroom property so that each bedroom will have its own bathroom.

4. If your friends are over, where do I go with my friends?  Roommates sometimes have friends over at the same time.  As a result, multiple distinct social rooms are recommended. One group can use the living room while the other group can use the patio, kitchen, or den area.

5.  The walls are too thin.  This problem stems from roommates being able to overhear  conversations or noise from adjacent rooms. The decades old solution was to provide double master units where the rooms are separated by other rooms (living, kitchen, bathroom).  Another solution could be the use of Quiet Rock or double drywall on the demising wall.

As with any roommate situation, each apartment with roommates is different and can have their own set of unique problems.  However, PMI is focused on solving these five major issues that were prevalent in their focus group study.

One of the most affordable ways to increase housing is to increase density.  One way this trend is playing out is through adults sharing apartments.  The Los Angeles Times article discusses the growing phenomena of “doubling up”.

Economists at Zillow crunched U.S. census numbers and found that 47.9% of adults in metro L.A. lived in “doubled-up” households in 2012, a number that has grown rapidly — up from 41.2% in 2000 — as the recession and yo-yo-ing housing market have pushed more people to share apartments.

“You’ve got a lot of households that are blending together,” said Zillow economist Skylar Olsen. “They’re doing that to make housing more affordable.”

Most adults require their own room.  Adults share two, three, and even four bedrooms apartments.   Many older apartments are large enough to be redesigned to add extra bedrooms.  The major impediment is parking as most buildings cannot add parking to accommodate the extra bedroom.

You can read the LA Times Article Below:

Nearly half of Los Angeles adults double up on housing, study finds – LA Times.

Here is another article extolling the growth of tech on the Westside.    The article talk about the tech scene and how it differs from Silicon Valley.  It is a good primer on the cultural changes that are happening in the coastal section of what I have termed the tech boot.  The growth of tech is occurring primarily in  the  base of the boot on the Coast, which spans from Manhattan Beach, through El Segundo, Playa Vista, Venice, and then Santa Monica.  The shaft pass through east Santa Monica, West Los Angeles, Culver City, Beverly Hills, Hollywood, Downtown, Burbank, and then to Pasadena. See https://pmicreativespaces.com/2013/11/17/the-los-angeles-startup-boot/

Web surfing meets wave surfing in Southern California’s ‘Silicon Beach’ tech scene | Fox Business.

A Folding Bike

One clever office provider in Santa Monica found a clever way to combine folding bikes, valets, and mobiles apps to solve their parking problems.  Since the office provider has a  proprietary system, I will describe it generally.

I can tell you from experience that Angelenos, even techies, do not like to walk very far from their parking space to their office space.  One company recently told me that they feared a two block walk from the parking lot to the office would hamper its recruitment of bright engineers.

Office commuters will accept valets as a parking solution.  However, valets can only accommodate so many more cars on an office building parking lot. It would greatly help the situation if the valet could also park the car within a mile (preferably a half mile from the office building).  So how does the valet  get back from those offsite spaces within an acceptable time?  This is where the folding bike/ electric scooter and the mobile app come in.

With a folding bike or scooter,  the valet receives the car; puts a folding bike/electric scooter in the back seat or trunk of the car; parks the car in a remote offsite lot; and rides the folding bike/electric scooter back to the office building to get the next car.  To later get the parked car, the valet reverses the  process.

With the mobile app, the office worker can request his car ahead of the time he wants it by sending an internal text to the valet.  The location of the car is saved in the internal cloud by the valet via mobile app.  Thus the worker can request his car ahead of time based on the advised wait time. One office provider has successfully implemented this type of system in Santa Monica and is considering developing the service for others.

One mobile valet app already live is described below.

Flash Valet

Flash Valet’s mobile app accelerates your car’s return — Tech News and Analysis.