Commercial Real Estate Thrives in Downtown L.A.

The real estate market may be in the dumps, but it’s still a seller’s market in the Los Angeles Fashion District, where demand for showrooms and design space is leading building owners to adapt to the changing marketplace and convert former manufacturing spaces into wholesale showcases.

Only 10 years ago, the California Market Center, then known as the California Mart, and The New Mart were the only showroom buildings in the district. Now, neighboring venues in the Intersection (Ninth and Los Angeles streets) including the Cooper Design Space, have leased up, and the demand for showrooms, especially in the contemporary category, has skyrocketed.

The West Coast’s hotbed of emerging contemporary labels has fueled much of the growth and demand.

That has led building owners along the periphery to fill in the gap. Newer venues such as the Lady Liberty Building and the Marion Gray Building (now known as the 824 Building) on Los Angeles Street have emerged over the past year as other fill-in locations on Broadway. In addition, the California Market Center, whose contemporary space on the fifth floor is also sold out, will open a new contemporary area in January.

The newer venues have not only helped to accommodate demand but have also brought value and opportunities for up-and-coming companies to the fashion district.

The Lady Liberty Building, located at 843 S. Los Angeles St. and noted for its tile-painted mural of the Statue of Liberty, has brought big showrooms and low rates to the downtown market.

“Why pay $3 to $4 per square foot when you can pay $1 to $2,” said Eric M. Martin, who owns The Park showroom with Kristen Aguilera in the Liberty building. The showroom features 6,500 square feet of open floor space, enough to handle Martin’s and Aguilera’s extensive collection of contemporary lines, including AC Jeans, Kain, Shirt by Shirt, Mighty Fin, Converse by John Varvatos, Trunk, UNIF and La Fine. Those lines feature everything from elaborately produced denim to novelty tees.

“We are close enough to [the Intersection of Ninth and Los Angeles streets] to feed off of its traffic. Buyers tend to be curious and like to explore new buildings,” Martin said.

Building manager Empera Arye said she does very little marketing. “It’s been all word of mouth,” she said. “We started with one showroom, and traffic has steadily increased over each market. It’s been getting stronger and stronger.”

The building currently has five large showrooms between 5,500 and 6,500 square feet, with original wood floors, exposed brick and lofted ceilings. “It’s very New York,” described Arye.

“I let the tenants do what they want [with the interiors].”

Martin and Aguilera have been known to host some big parties during markets and special events because of the expansive space they now have.

Two more spaces will become available in about three months as the older tenants vacate the building. Eventually, Arye hopes to open showroom space on the ground floor, which is next to the highly visible The Bank/Hatch showroom at The New Mart.

Other Lady Liberty tenants include The Globe West, the California version of the contemporary New York showroom created by Jeffrey Cayer, featuring labels Bella James, Camilla Marc, Elijah, Eurythmic, Nancy Gaten and Smyth, among others. The Kascade showroom is a recent addition featuring mostly menswear lines including Robert Graham, Takel, Simple Standards, Chip & Pepper University, Proportion of Blue plus Quiksilver women’s.

Across the street at 824 S. Los Angeles Street, the building formerly known as the Marion Gray Building has also launched showrooms within the past year. Five floors of showrooms leased up in a matter of weeks, said the landlord, who declined to be named. Tenants include NSF Clothing, Literature Noir, Alix & Kelly, Lady Muse, Class, Glamourosity, International Cake, Found, The Sundeck and The Apparel Collection.

Like the Lady Liberty building, space here is expansive, running up to 5,000 square feet.

“I love it here because it’s away from competitors and the buyers see only my lines and don’t wander off,” said Jacqueline Lee Rose, owner of the Class showroom, which carries predominantly Australian clothing and accessory labels, including Radenroro, Zayt, Gina Kim, Ghostola, Rebecca Thompson, Lazy Bones and Trophy Wife.

Rose said she does have to do some of her own marketing to get buyers into the showroom. “There’s some good energy here,” she said.

Also returning on the scene is the Gerry Building, located at 910 S. Los Angeles St., which has once again been revamped after an attempt to turn the building into wholesale condominiums was foiled by the lending crunch.

The Gerry’s owner, Hermosa Beach, Calif.–based LaeRoc Funds, is remodeling some of the common areas and plans to open the roof to parties and special events. It’s once again leasing showrooms on an individual basis, both for temporary and permanent space, said LaeRoc’s Kim Benjamin.

The California Market Center’s long-awaited Area 4 contemporary showcase is expected to open in January, about six months after the original planned opening. About 25 showrooms, ranging in size from 900 to 3,500 square feet and featuring contemporary women’s and men’s apparel and accessories, will take up residence in the new section, located in the B building of the CMC.

Construction is underway and permits have been issued, said CMC spokesperson Deborah Levine. The CMC has hired a new leasing executive, Michal Goldvaser, to handle Area 4.

Frank Gehry proteacute;geacute; Eva Sobesky of EIS Studio designed the project, which will feature an atrium extending to the fifth floor. Plans are to create an opening through the fourth floor’s ceiling to connect Area 4 to the building’s fifth-floor contemporary area. One of the features includes a co-op space called “The Gallery,” featuring indie designers who can rent individual racks and handle their own sales. It’s an alternative for newer and up-and-coming designers who may not be able to afford their own showrooms, Levine said. For the CMC, it’s a way to develop emerging talent and foster growth for Los Angeles’ fashion scene.

“Contemporary has been very much in demand. We’re fortunate to open up this space at this time. We anticipate that this will be one of the top locations—if not No. 1—for contemporary space in Los Angeles,” Levine said. An Area 4 Web site will be launched in October and will be accessible by invitation only. Independent spirit

Some apparel companies are also establishing their own presences in the Fashion District by buying up stand-alone real estate. Earlier this year, Tarrant Apparel Group moved into an 8,000-square-foot corporate showroom at Ninth and Los Angeles streets, where it is now wholesaling its KitsonLA, American Rag, Seven7, Chevignon, Indian Rock Culture and ReRock lines. Hot Tuna International also opened a design center and showroom a few buildings to the north.

Los Angeles–based Roar Clothing later this month will move from South Los Angeles to downtown at 200 E. Ninth St. in suite 301, just above the Tarrant space. Roar, a menswear line, will feature a new showroom as well as design and office space covering 4,000 square feet, said Chief Executive Officer Deepak Vasandani.

“It’s an exciting environment [Downtown Los Angeles]. We’re going with our growth and momentum.”

And more recently, flamboyant accessories designer Tarina Tarantino closed escrow on a building off Broadway and Ninth Street, where she will set up another expansion of her growing business, confirmed a company spokesperson who did not specify the type of business.

Broadway has also been a target for other designers. Susana Mercedes and 12th Street by Cynthia Vincent are now in the landmark Wurlitzer Building, located at 818 S. Broadway. The recent move-ins are leading the Fashion District’s Business Improvement District to annex this portion of Broadway into the Fashion District next year, said Kent Smith, executive director of the Fashion District.

Owners of the L.A. Apparel Mart building, located at 112 W. Ninth St., near the corner of Ninth and Main streets, are also hoping to capitalize by leasing showroom space on its second floor, which was originally developed about 10 years ago.

“It never took off,” said landlord Glen Sitwell. “Nobody was prepared to walk across the street. Unless your whole building is a destination for showrooms, it’s difficult.”

The building houses the popular New Moon restaurant as well as dozens of design and sample-making studios for apparel companies.

Sitwell said his building has been able to capitalize on the displacement of manufacturers who lost their spaces due to the flurry of residential loft projects in the area.

“We’re not along the lines of a New Mart, but we’re not on the level of some of these dilapidated sewing buildings either,” Sitwell said.

And for those who don’t mind being a mile or so away from the main action, the Twin Springs buildings at 433 S. Spring St. are only about 60 percent occupied, said building manager Alfred Padilla. The buildings have been filling up with several Ed Hardy licensees, some of which are maintained by owner Henri Levy, who also handles Spy and Sheragano.