The legendary group is preparing to deliver 350,000 square feet of speculative creative office space to a pocket of the Los Angeles market that is seeing growing demand for the product. The developer will build a 17-story tower called Above from the ground up in the Downtown Los Angeles Arts District.
Above will sprout at 411 S Hewitt St., surrounded by a growing number of projects that are ushering in the Arts District through its conversion into a work and play destination. According to a report by Cushman and Wakefield.
“There’s huge demand in the arts district,” said Mike Condon Jr., vice president of Cushman & Wakefield. commercial real estate director. “We are currently tracking nearly 4 million square feet of possible requirements and are aware of over 600,000 square feet of proposals being negotiated in the submarket. Of the seven Class A projects that were delivered, five of the seven projects either pre-released or signed deals within six months of receiving a [temporary certificate of occupancy].”
Very creative office
Designed by an architectural firm people, Above will include 311,000 square feet of Class A office space spread over 12 floors, as well as 22,000 square feet of production, retail and/or restaurant space on the ground floor. The building will also offer ample parking space on three levels underground and four levels above ground, which adds to the amenity category because, despite progress in subway construction activity, Los Angeles remains, in to a large extent, an automobile city.
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Legendary describes Above as a “one-of-a-kind” project and backs up the claim with an amenities list that includes private outdoor patios on each floor, a street-to-street breezeway, floor-to-ceiling glass, and a host cleared spaces for tenants needing space with volume.
“As well as being by far the tallest project with an unobstructed 360 degree view – Above is not just a clever name, given that the full office first floor starts six stories in the air – it is also appeals to a more creative kind of tenant who is attracted to the submarket,” said Brittany Winn, director of Cushman & Wakefield. CPE. “With parking above the market, outdoor amenity areas enabled on each level, and several elevated unobstructed opportunities with up to 24 feet of headroom, it literally checks every possible box a tenant will have in their demanding quiver.”
Everybody loves a comeback
The Greater Los Angeles office market has yet to regain its pre-pandemic battling status, after posting a 21.2% vacancy rate in the first quarter of 2022 and negative overall net absorption of 117,000 square feet, according to research by Cushman & Wakefield. However, McKenna Gaskill, a partner at Cushman & Wakefield, believes the Metro will recover in phases and the signs are already there with successful projects that are either well-located, new or newly repositioned. “What will take a little longer are less moving or less well-located assets that don’t make employees want to return to work,” McKenna said. CPE.
Despite the Arts District’s popularity, Downtown Los Angeles is struggling with a 27.9% vacancy rate in the first quarter of 2022 and an overall negative net absorption of 233,000 square feet, according to a Cushman report. & Wakefield. Still, downtown, like Greater Los Angeles, is showing signs of recovery.
“There is a residential population of almost 80,000 which has driven apartment fundamentals to nearly 95% rental and we are finally seeing new retailers coming in and filling the space that has been vacated by civil unrest. We needed these components to make DTLA feel ‘safe’ again and the market is doing well to see tenants return more broadly in late summer and early fall,” added McKenna.
Legendary, developer and owner of Above, plans to begin construction of the office building in mid-2023. Condon, Winn and Gaskill of Cushman & Wakefield, along with colleagues Pete Collins and Scott Menkus, will oversee leasing responsibilities for the project. If all goes as planned, Above will welcome its first tenants in early 2026.