Quote:
Originally Posted by Kingofthehill
Yeah, the ground level area on the Blackstone Building is done. I hope the 82 units it'll bring online will better anchor/revitalize that southern end of Broadway:
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Thanks for the pic, KOTH. I've been hearing about the blackstone being prepped for lofts for quite some time. but if the bldg in your pics is supposed to be soon ready for new residents, it sure doesn't look it.
I would think a good scrub down would have been part of phase 1 & done months ago. that's even more the case if the interiors & window frames already have been renovated. IOW, I'd think the owner would have wanted to wash away yrs & yrs of grime before working on the interior.
as for the street it's on, here's some news that should remain on the record for ppl trying to figure out what broadway's future may or may not be like.
The Broadway Backslide
Once the Busiest Retail Corridor in Downtown, Key Street Now Suffers From High Vacancy and Low Rents
by Richard Guzmán
Published: Thursday, May 27, 2010
DOWNTOWN LOS ANGELES - You can find just about anything for sale on Broadway. Stores, many of them small mom and pop shops, hawk everything from wedding dresses to plastic toys to opulent jewelry. In some ways, the street has barely changed in decades. On weekends in particular, Broadway is filled with activity as mostly Latino shoppers crowd the sidewalks while retailers scream out the bargains from the front of their stores.
But something else has changed drastically, and shoppers can now easily find something that used to be rare:
vacant storefronts. At least 20 “For Lease” signs dot Broadway from Second to Ninth streets. On a recent weekday afternoon, dozens more street-level storefronts were shuttered.
A survey conducted by officials with Bringing Back Broadway, 14th District Councilman José Huizar’s effort to turn the street into a major, entertainment-focused destination, found that the
vacancy rate is now 18%-20% on the portion of Broadway between Second Street and Olympic Boulevard. That comes at the same time that rents have tumbled.
Some blame the economy for the trend, while others attribute it to landlords unwilling to renegotiate high rental rates. Still others believe the
traditional customer base has moved on to places that are catering to their needs and pocketbooks.
“The current decline seems to have started about a decade ago, when other cities like Lynwood, Baldwin Park and Huntington Park began realizing there was a big market for Latino shoppers and started catering to that market,” Huizar said in an email to Los Angeles Downtown News. “Also, a lot of those people began gravitating to high-profile malls that cater to everybody. Not only do Broadway’s businesses suffer when those customers take their dollars elsewhere, but the city misses out on tax revenues and jobs, too.”
Glory Days
The historic corridor is flanked by impressive buildings constructed in the early part of the 20th century. Broadway houses 12 historic theaters, and in the 1920s through ’40s the street was a hub of entertainment and commerce. Residents and tourists would flock to the area, where they would shop and get around via streetcar.
The area has remained active through the years, though the demographics shifted; in recent decades the focus has been on b
argain shopping and the Latino consumer. In several spaces, large, swap-meet style operations have been set up. In other locations, it is inexpensive electronics.
Jessica Wethington-McLean, the executive director of Bringing Back Broadway, said a retail survey conducted last year, with information provided by local brokers, revealed the 18%-20% vacancy rate. The area holds about 155 buildings with approximately 80-90 property owners. Wethington-McLean attributes the rise in vacancy to several factors, such as
shoppers heading to places like Lynwood’s Plaza Mexico, a 650,000-square-foot mall designed after Monte Alban, an ancient city near Mexico City. It offers 250 stores, restaurants and even a carousel. “They have basically an entire little village targeting the Latino shopper,” she said. “You have municipalities that are targeting our basic shoppers that have been faithful to Broadway for the last 15 years.”
Jorge Corralejo, chairman and president of the Downtown-based Latino Business Chamber of Greater Los Angeles, sees Broadway’s vacancy issues more as a result of the economy than attempts by other cities to lure Latino customers. “With the high rate of unemployment people have less money in their pockets,” he said. “It’s not just about Broadway. This is happening in a lot of places.”
Steve Needleman, a longtime Downtown stakeholder who owns the Orpheum Theatre on Broadway, along with about 1 million square feet of property in the Central City, agrees that the vacancy is the result of the economy. But he also thinks increased competition is having an effect. Needleman noted that the competition is not just coming from other cities. He also pointed to Santee Alley, the Fashion District bargain hunter’s mecca. “There is so much competition to what Broadway used to be, the main shopping thoroughfare,” Needleman said. “There’s just tons of competition from everywhere.”
Time to Negotiate
Some landlords are starting to feel the pain.
Derrick Moore, vice president of brokerage services at real estate firm CB Richard Ellis, said that in the last two years
Broadway rents have dropped drastically as a result of the vacancies. He said rates under $2 per square foot are now common. That’s a far cry from the time when some small spaces commanded $7 per square foot, he said. (In fact, a common claim from the 1990s was that Broadway street-front rents were comparable to those of street-level space in Beverly Hills.)
Wethington-McLean, along with other local retail brokers, also noted that rates of about $2 per square foot are now common on Broadway.
Moore noted that sometimes, rental negotiations between tenants and landlords are contentious. “I’m seeing tenants playing hardball,” he said. “It’s a terrible game of chicken where they are saying, ‘Hey, I need you to lower the rent or we are shutting the doors,’ and you come back and doors are actually being shut.”
Moore said landlords not willing to negotiate risk adding to the vacancies along the corridor. Peklar Pilavjian, who owns about 300,000 square feet of space at the St. Vincent Jewelry Center, which partially fronts Broadway, agrees. He said his occupancy rate has remained steady, but only because he is working with tenants who are suffering.
Pilavjian said rents at his property average about $3-$4 per square foot, and while Jewelry District tenants pay slightly more than other retail merchants on the street, it is still a far cry from the past. He said that more than a decade ago he could get up to $12 per square foot. Now, he said, all the old rules are out the window, even if someone signed a contract. “If you have a tenant that signed a five-year lease and that was two years ago and he can’t pay, what do you do?” Pilavjian asked. “You hold them to their contract and make them fly the coop? No, you don’t want to do that. You want to keep them there, so you rip up the old contract and you write a new one that reflects today’s conditions.”
The feeling is shared by Ramin Saghian, who owns about 26,000 square feet of retail space at 543-547 and 437 S. Broadway. He said his rents right now average about $2 per square foot, though the range is as low as 50 cents and up to $10 per square foot for small spaces that face the street. “There is always the question of demand and supply,” he said. “In the good times demand was high and supply was low and rents were higher. Now it’s the other way around.”
Huizar said Bringing Back Broadway is offering small businesses support such as workshops on how to utilize incentives and loans.
He is also hoping to reactivate the upper floors of buildings throughout the corridor. “If we do this right, Broadway will be reactivated from storefront to rooftop,” he said.
Needleman sees Broadway as an ever-changing part of Downtown. The vacancies along the corridor, he said, will eventually be
filled with new businesses, even if they are different than what has occupied the street in the past. “It’s the natural change of the area, I think that’s happening now,” he said. “If you take its 80-90 year history, it’s taken different paths, and that path will again change.”
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