LOS ANGELES | Downtown Project Rundown 4.0

[blackcat23]

Originally Posted by pesto

http://www.stltoday.com/sports/football/...2c1e2ac-eaed-11e1-9314-001a4bcf6878.html

We occasionally get into the discussion on the proposed LA football stadiums. This is STL's proposed enhancements to their stadium. A panel of 3 arbitrators will decide what updates are needed (the criteria being that the stadium must be in the top 25% of NFL stadiums). If the city agrees to pay for them, the Rams will likely stay in STL. If not, the lease terminates and they may very well come to LA.

Also of relevance:

http://www.dailybreeze.com/sports/ci_21359781/rooney-says-nfl-coming-l-within-5-years

Both stadiums have cleared vital hurdles within the last two years, perking the NFL's interest in the process, and Rooney said the league will start taking a deeper look at each project.

"I think progress is being made," Rooney said. "I'm not sure I'd say it's a done deal yet; some work needs to be done. But they're making progress, and I think site selection will probably be the next thing that happens."

The equally bigger question is which team, or teams, make the move to Los Angeles.

With the Minnesota Vikings finally getting their stadium deal done, the San Diego Chargers, St. Louis Rams and Oakland Raiders remain the strongest possibilities.

[Illithid Dude]

Originally Posted by Mojeda101

Anyone else see the green tarp around the perimeter of 9th and Olive? Could be breaking ground this week if it stays on schedule!

That's nice. It's good to see something so substantial not only breaking ground on date, but breaking ground at all.

[sings twin]

Interesting article in todays Wall Street Journal.

Chunk of L.A. Skyline Could Be for Sale
Big Office Landlord MPG Office Trust Hires Adviser to Find Firms to Buy the Company or Make a Significant Investment

By ELIOT BROWN

After years of struggling with too much debt and too few tenants, the largest office landlord in downtown Los Angeles is considering selling itself to the highest bidder, according to real-estate executives with direct knowledge of the planning.

MPG Office Trust Inc., MPG +8.62% formerly known as Maguire Properties Inc., has tapped real-estate adviser Eastdil Secured to search for firms to buy the company or make a significant cash investment, those executives said. A company spokeswoman didn't respond to requests for comment.

U.S. Bank Tower, the tallest building west of the Mississippi River, is one of the downtown Los Angeles towers owned by MPG Office Trust.

With the potential to pick up a large chunk of the downtown Los Angeles skyline in one fell swoop, real-estate-investment giants including Brookfield Office Properties Inc. BPO.T -0.24% and Colony Capital LLC are considering bids, as are midsize companies such as Piedmont Office Realty Trust Inc. PDM 0.00% and Thomas Properties Group Inc., TPGI +0.18% the executives said.

Still, a sale isn't certain. MPG has previously sought so-called strategic alternatives without striking any deals. But if the company is sold, the move could reshuffle ownership of some of the most iconic office towers in the nation's second-largest city.

MPG owns six towers in downtown Los Angeles, including the angled brown granite KPMG and Wells Fargo towers, as well as the 73-story U.S. Bank Tower, the tallest building west of the Mississippi River.

"The timing to raise equity or sell the company is very good," said John Guinee, an analyst at Stifel, Nicolaus & Co. Because MPG has downsized significantly from its sprawling 2007 size—it has handed numerous buildings in the suburbs as well as downtown over to lenders—that makes the remaining buildings centered in the downtown more appealing to would-be buyers, he said.

MPG's advisers have indicated to potential buyers that they want the company to sell above the share price. That price recently has hovered around $3 a share, down from more than $44 in early 2007, with a market capitalization near $160 million. In addition, any buyer would likely have to take on the heavy debt load tied to the downtown towers, which MPG earlier this month reported was nearly $2 billion.

to read rest of article:

http://online.wsj.com/article/SB10000872396390443713704577603510462620048.html?KEYWORDS=chunk+ofhttp://online.wsj.com/article/SB10000872396390443713704577603510462620048.html?KEYWORDS=chunk+of

[pesto]

Originally Posted by sings twin

Interesting article in todays Wall Street Journal.

Chunk of L.A. Skyline Could Be for Sale
Big Office Landlord MPG Office Trust Hires Adviser to Find Firms to Buy the Company or Make a Significant Investment

http://online.wsj.com/article/SB10000872396390443713704577603510462620048.html?KEYWORDS=chunk+ofhttp://online.wsj.com/article/SB10000872396390443713704577603510462620048.html?KEYWORDS=chunk+of

Sounds bad. What they (and their stock price) are saying is that they are more or less broke even after walking aways from most of their portfolio. I would guess this means not much commercial highrise downtown for some time. But lower rents could induce some new activity or at least less fewer companies leaving.

[colemonkee]

Indeed, that is not a good sign for commercial development in the near term. But if deep-pocketed players such as Brookfield can get their hands into downtown, it could be good for long-term commercial development in the future, as they have the money, credit, and experience to lure tenants to new developments. Of course, that all depends on demand increasing dramatically for office space downtown, which we're just not seeing right now - or likely for the next few years.

[LAofAnaheim]

Originally Posted by Illithid Dude

That's nice. It's good to see something so substantial not only breaking ground on date, but breaking ground at all.

What's breaking ground at 9th and Olive?

[BrandonJXN]

^

[LosAngelesSportsFan]

unfortunately, there is no green fence or tarp around the site. are you sure you saw one???

[colemonkee]

File under "More Disappointing News". Basically, the City is delaying the University Village project because they're afraid it will improve the area too much. From Curbed LA:


Image Source: Curbed LA

City Wants Report on The Village at USC's Gentrifying Effects

Wednesday, August 22, 2012,
by Adrian Glick Kudler

After a three hour hearing yesterday, the City Council's Planning and Land Use Management Committee decided to punt on the huge The Village at USC project. The redevelopment would take the rundown old University Village and remake it into a mixed-use plaza with retail, dorms, a grocery store, and green space, but locals have worried the plan will be too gentrifying, pushing out USC's low income neighbors. In response, PLUM yesterday "asked for more information about how other major universities have handled community concerns during major upgrades — including fears that low-income residents could be displaced," reports the LA Times. The report is expected in mid-September, but USC is antsy--this plan has been in the works in one form or another for nine years now.

Source: Curbed LA

[Illithid Dude]

My guess is that the University Village will go through. USC has sway, in that regard.

But concerning the article on office space, I'm confused. This article seems to fly in the face of everything I've read about office development in DTLA, for better or for worse. I've always read that the office vacancy rate is at 18% in DT. Why does this article say the office vacancy rate is now at 14%? Did the office vacancy rate really go down 4% in the past couple months? If so, that would be cause for celebration, regardless of what the article says. Moreover, why does this article seem certain that the office vacancy rate in DT is going to rise, when every other article says not only that the office vacancy rate is going to fall, but that multiple developers are actively planing new office space in Downtown? Is there someone more versed in such affairs that can explain these issues?

EDIT:

Fun slideshow I found about where to ear, drink, and shop in Downtown.

http://www.refinery29.com/downtown-la/slideshow#slide-1

[Mojeda101]

Originally Posted by LosAngelesSportsFan

unfortunately, there is no green fence or tarp around the site. are you sure you saw one???

Yeah I apologize for that, apparently it was an unreliable source, sorry guys =S

[JDRCRASH]

Does the class of downtown's office space (A, B, C) have any factor into office vacancy rates?

[LAofAnaheim]

Originally Posted by Mojeda101

Yeah I apologize for that, apparently it was an unreliable source, sorry guys =S

Yeah, I walked by 9th and Olive tonight and saw no tarps. Let's make sure stuff is verified by either pics or if the news has broken on Twitter or news sites. We've seen many false hopes over the years........

[LosAngelesDreamin]

Originally Posted by Mojeda101

Yeah I apologize for that, apparently it was an unreliable source, sorry guys =S

Lol you silly goose

[Mojeda101]

Originally Posted by LAofAnaheim

Yeah, I walked by 9th and Olive tonight and saw no tarps. Let's make sure stuff is verified by either pics or if the news has broken on Twitter or news sites. We've seen many false hopes over the years........

Well did you see anything out of the ordinary? LosAngelesSportsFan did say there were 3 trash bins at the lot. Construction was slated for Mid-August =/

[citywatch]

Originally Posted by Mojeda101

Yeah I apologize for that, apparently it was an unreliable source, sorry guys =S

given the history of new devlpt often having delays within delays within delays....some of it due to silly politics----the proposed new shopping ctr next to USC is now on an even slower track?!!-----& the apt tower at 9th & olive possibly not starting one second sooner than expected, & the info from the article that sings twin posted, I wanna say, in the famous last words from a well known movie set in LA....

forget it, Jake. It's Chinatown.

Any sale will be viewed as a proxy for investors' views on the future of the downtown Los Angeles office market, a poorly performing district that has struggled to find tenants for its gleaming office towers. While entertainment and technology firms like Google Inc. are growing in areas like West Los Angeles, downtown is heavy on financial-services firms and law firms, which have been contracting.

"The tenants that are in downtown L.A. are not the types of industries that L.A. does well," said Ryan McCullough, an economist at real-estate research firm CoStar Group Inc. "So far, we've seen no evidence that greater downtown is able to attract different types of tenants."

The result is a game of musical chairs, as tenants hop from one downtown building to another, often taking less space. That has led to vacancy rates in top-quality buildings downtown increasing to 14.5% in the second quarter, the highest rate since 2005, according to CoStar, even while overall Los Angeles saw its vacancy rates stay flat for the past two years around 12.5%.

^ and some ppl, myself included, actually once believed improving transit, esp the opening of the red line, would change long term trends of businesses always making a beeline for hoods other than dtla.

I imagine most of the ppl out there who make the decisions where their office will be located couldn't care less whether new towers in dt have parking podiums or not, or stores on the 1st floor or not, or new bldgs are too tall or too short, or whether a new proj will earn a design prize or not, or whether jane jacobs principles in urban design are being followed or not. I bet most of them continue to notice & are about the fugly, rundown vibe that still is noticeable in too much of dt & the areas that they have to go through to get there. that's , cuz I don't know what it will take to finally change such trends.

[pesto]

Originally Posted by colemonkee

Indeed, that is not a good sign for commercial development in the near term. But if deep-pocketed players such as Brookfield can get their hands into downtown, it could be good for long-term commercial development in the future, as they have the money, credit, and experience to lure tenants to new developments. Of course, that all depends on demand increasing dramatically for office space downtown, which we're just not seeing right now - or likely for the next few years.

Very true. Highly successful real estate investors typically have high marketing skills AND can tell what is capable of being marketed from that which is hopeless. In that sense, their buying DT is a good sign. But not so much for MORE building, just for getting the present buildings occupied.

It will be interesting to see how they build demand.

[pesto]

Seems unlikely that transit attracts much business. Transit is a trailing indicator, needed to manage the people responding to some benefit that has attracted them. Otherwise, you could build subways in the Mojave and turn it into Manhattan. Of course, after the demand exists, good transit makes it possible for an area to expand without choking. But the demand comes first.

The SC debacle is amazing. The city is basically trying to protect its slums from encroachment by investors trying to use their own money to improve their own property. No one is being uprooted, evicted or even affected. The only short-term effects are hundreds of jobs; campus-adjacent, retail-over-residential housing; and freeing-up of more "affordable" housing in the 'hood. SC shouldn't have to use its influence; the city should be begging them to accept 100M to help the project along.

Over 5-10 years, you would hope for increased demand to live in the area; inflow of people and investment; new and improved housing adjacent to downtown and around the university; and a richer city. The cost (and it is legitimate to some extent) is that some poorer people will have to move a few blocks away. Given the 30 plus sq. miles of affordable housing starting 2 blocks south and east of SC, this is not much of an inconvenience over 5-10 years.

[202_Cyclist]

pesto:
"

Seems unlikely that transit attracts much business. Transit is a trailing indicator, needed to manage the people responding to some benefit that has attracted them. Otherwise, you could build subways in the Mojave and turn it into Manhattan. Of course, after the demand exists, good transit makes it possible for an area to expand without choking. But the demand comes first.

This might be the most ridiculous statement made in this thread to date. Of course transit attracts business. Without transit, you could never have the density found in the central business districts of Manhattan, Chicago, DC, etc... Parking and road capacity would take up much of the land that would otherwise be committed to office and residential development, negating the economies of scale that have been well-documented to give cities a competitive advantage. Transit also improves mobility and commutes for workers, making it easier for businesses to attract top talent to their firms and workplaces.

If you don't think transit attracts business, you need to take a look at DC.

"Of the more than $800 billion in assessed property values located within the WMATA Compact area, almost 15 percent is located within a ¼ mile buffer of Metrorail stations, and 28 percent is located within a ½ mile buffer...Of this total, residential properties (single family) make up $44.4 billion of the real estate within ½ mile of Metrorail stations and $13.4 billion within a ¼ mile. Similarly, commercial properties (multi-family, office, retail, and other) make up $188.6 billion of the real estate within a ½ mile of Metrorail stations, of which $115.9 billion is located within a ¼ mile. Government-owned and other non-taxable properties, on the other hand, represent $2.4 billion of real estate within a ½ mile and $0.5 billion within a ¼ mile of Metrorail stations..."

http://www.wmata.com/pdfs/planning/WMATA...0Transit%20Final%20Report%20Jan-2012.pdf

For a more current example, look at the Silver Line extension to Tysons and Dulles airport. There is quite a bit of development occuring throughout the DC area but there is literally tens of billions of dollars of development next to the Silver Line stations either under construction or planned in Tysons and the Dulles Corridor. This is not spread around haphazardly, but specificly concentrated next to the planned stations.

Another example is the H Street corridor in the District. Just five years ago (and perhaps even more recent than that) this corridor was almost entirely vacant buildings, strip-malls, and empty lots. There has been at least $1B - $2B in investment in the past five years in this corridor alone in the expectation of the streetcar line.

[BrandonJXN]

Originally Posted by pesto

Seems unlikely that transit attracts much business. Transit is a trailing indicator, needed to manage the people responding to some benefit that has attracted them. Otherwise, you could build subways in the Mojave and turn it into Manhattan. Of course, after the demand exists, good transit makes it possible for an area to expand without choking. But the demand comes first.

• Video Link