Tag Archives: westside

Selling Creative Office in Downtown LA to Westsiders

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Michael White

Michael White, Principal of Gensler Architects

On February 21st, 2013, Michael White, a principal at the architectural firm of Gensler, participated on a panel about creative office in Los Angeles.  He discussed Gensler’s move from the Westside of Los Angeles to Downtown Los Angeles.  According to White, when Gensler announced that they were moving their offices downtown, employees expressed shock and disappointment.

The senior executives noticed that many of the associates rent housing, instead of owning.  Gensler sold the downtown location by stressing that it would be much more affordable for the associates to one day buy in the neighborhoods near downtown than those on the Westside.  According to White, the housing affordability argument helped turn the tide of opinion to a positive one about the move to downtown Los Angeles.

Represent LA: Geographical Breakdown of Startups in Los Angeles

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Represent LA is a website that maps the location of new tech start ups and investors in Los Angeles.  The map is useful because it allows people to browse according to location, investors, or company name.  With Represent LA, it’s easy to see which areas have the highest and lowest numbers of startups, which could be a factor for a new startup in their search for leasing creative space.  The creators of the website also promote a sense of community and support by offering up the ability for companies who do not see their business on the map to submit their information to be added.

The geographical breakdown of startups within Los Angeles can be determined by exploring the Represent LA map.  Currently, downtown Santa Monica and Venice have the highest concentration of start ups, followed by the area east of downtown Santa Monica.  Surprisingly, Santa Monica airport area has many startups while Playa Vista does not.

Downtown Los Angeles, Hollywood, Culver City, El Segundo, Pasadena, Tri-Cities, and the greater South Bay have moderate levels of start ups.  San Fernando Valley, Century City, Westwood, and the Beverly Hills area contain low levels of startups.  The fewest startups, however, are located in Malibu, South Los Angeles, Mid-City, East Los Angeles, and the San Gabriel Valley.

It seems that Silicon Beach is continuing to grow as an area that start ups are drawn to, which is consistent with the articles we have shared about in past.  Conversely, Pasadena’s start up activity seems to be on the decline.  Represent LA’s map is a great way to find start ups, coworking space, investors, or consulting firms in Los Angeles and will hopefully be another resource tech start ups will be able to efficiently use.

Los Angeles Business Journal Article on PMI Partner Jeffrey Palmer

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One of PMI’s partners, Jeffrey Palmer, was featured in the latest edition of the Los Angeles Business Journal.  Click the link below to read the article in its entirety.

LABJ Article From Who’s Who In Real Estate Aug 27-Sept 2 2012

Culver City Evolves from Quiet Community to Urban Area; Gains a ‘Media for the Web’ Cluster

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Maker Studios, a company that produces media content for the web, just signed a 50,000 square foot lease at 3562 Eastham Drive in Culver City.  Maker Studios joins other recent media-for-the web content companies in the Hayden Tract.  Several companies include Four Wall Studios, Mahalo, and Popsugar.  The cluster of these firms gives rise to a small community that could encourage other firms in this emerging industry to also seek office space in Culver City.

The success of these firms would also help create a new source of demand for Culver City creative space.  These media-for-the web firms join other creative office companies in Culver City that include digital advertising, entertainment, old media, and software firms.  A recent article from the Los Angeles Times discusses the success of Culver City and its challenges.  The addition of 1100 parking spaces at the Washington and La Cienega Expo stations helped convince these firms to locate in Culver City.  As some tech companies scale to 10 employees per 1000 square feet, the Expo line may provide one of the few ways for firms to help provide an alternative to parking to accommodate such density.

Culver City has transformed into one of main areas on the Westside that many tech and media tenants have been drawn to for creative office space.  In the second quarter of 2012, Culver City  had a net absorption of 16,000 square feet, with the asking rates for Class A and Class B space remaining constant from the first and second quarters of 2012.

The Future of Office Workspace: Less is More

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Some may argue that office space in West Los Angeles has become too plentiful. Soft markets, when there is an excess of supply over demand, occur about 80% of the time.  Conversely, tight markets occur about 20% of the time.  Los Angeles brokers and building owners have to face the reality that demand has been decreasing over the last two decades.  This industry is very mature, and it may be time for a change.  As this article from CoStar Group points out, one of the changes that should be made in office design is to accommodate the needs of the next workforce generation.  Unfortunately, the next generation demands less, not more, office space per employee.

To add value to their properties, Westside Los Angeles office owners will need to design spaces that operate with greater efficiency.  They will also have to account for greater densities of employees in these spaces.  These two tasks need to be accomplished simultaneously while continuing to foster an interesting and creative atmosphere.  These environments will further promote collaboration and will have a positive effect on employees rather than sticking them in cubicle farms.

The Westside does not need more space, but simply better quality of space. Despite a 20% vacancy rate in Playa Vista, developers are planning to bring on another million square feet of office space in the next couple of years.  If the future workforce demands less space, one may question why this is being planned.  Investors, developers and owners have to ask themselves if they are meeting a tenant demand or investor demand.

Media Company Sugar Publishing, Inc. Leases 15,300 Square Feet in Culver City

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Sugar Publishing, Inc., a privately owned media company that produces a network of blogs and ecommerce sites for women, leased 15,300 square feet at 3525 Eastham Avenue in Culver City’s Hayden Tract this month.  Sugar follows Mahalo Inc., another digital media company, who leased 13,300 square feet in November at the same property and also left Santa Monica in search of more affordable creative offices.

Culver City has become one of the best Westside alternatives to Santa Monica for creative space at significantly lower rents.  The area is now a hotbed for entertainment and media companies due to its prime location on the Westside, its new restaurant and art scene, and its plentiful supply of converted warehouses. With 3525 Eastham being positioned well in the Hayden Tract, PMI designed the building with creative companies in mind.  According to Jeffrey Palmer of PMI, “PMI originally designed 3525 Eastham for software and web based companies that need high density while maintaining a creative environment; although the design works very well for entertainment companies as well.”  The 24 foot soaring bow-truss ceiling, multiple oversized glass roll-up doors and numerous skylights help create a sense of spaciousness even with very high employee counts.  The City of Culver City is very interested in attracting digital media firms to the area.  It recently committed to purchase 180 parking space privileges in a parking structure to be built by a local developer.  Culver City has invested in parking and transportation infrastructure (including new redevelopments at the nearby Expo light rail station at Washington and National) to help entice these new digital technology companies to Culver City.  In addition, a new Hayden Tract Owners Association has formed to build 120 additional parking spaces on a former Cal Tran easement and to promote other improvements to the Hayden Tract.

Sugar Publishing has expanded from their San Francisco & New York locations to begin their tenure in Los Angeles.  Sugar prides itself in providing their 20 million global unique users insanely addictive content, unmatched shopping experiences and a robust social community.  The company has two business segments focusing on original content and commerce with a portfolio of brands including PopSugar, FabSugar, BellaSugar, FitSugar, GeekSugar, PetSugar, and PopSugar Retail Therapy.  Cementing their spot as a media force to be reckoned with, in May 2010, Sugar was named among the Hottest Companies in San Francisco. Sugar’s employees are extremely passionate about the brand, which shows in the amount and quality of content they produce on their numerous sites.

Brian Sugar currently serves as the company’s CEO and Publisher, while Lisa Sugar is the company’s Editor-in-Chief.  According to their website, the story behind the creation of Sugar, Inc. came from a comment at Oscars party Brian and Lisa Sugar threw at their home in February of 2005.  In 2006, they received Series A Funding from Sequoia Capital and have been expanding ever since.

During the pre-leasing process, PMI Properties was represented by David Wilson of Lee & Associates and Sugar Publishing, Inc. was represented by Matt Brainard of Studley, Inc.

Advertising as a Barometer of the Westside Creative Office Health

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Advertising is a big part of what drives Westside Creative Office. Although 1.8% growth in 2011 is better than the 12% reduction in 2009–it is still under the 5% in 2010. The article below notes that demand, like the economy, started strong in the first half of the year and then sputtered out. Luckily for Santa Monica–tech filled in and more. Other parts of the Westside lagged. Unless tech takes on much more relevance or advertising picks up–other areas of the Westside may continue to experience more muted demand from creative office users.  The Westside has benefited from growth in digital advertising (e.g. Google Adsense, Rubicon Project) and convergence media (the convergence of media contect onto the web–think Hulu) and E marketing (e.g. Shopzilla).  Although traditional advertising slowed, digital advertising continues to flourish.

http://articles.latimes.com/2011/nov/15/business/fi-ct-tv-advertising-20111115