Smells like something’s rotten at the 7th Street Produce Market. The fruit and vegetable vendors there are not happy with landlord Atlas Capital Group.
Since the New York real estatement investment firm bought the downtown L.A. warehouse space in 2014, tenants have become more and more concerned about higher rents and shorter leases.
The 70 or so vendors have seen their rent increase by 20 to 25 percent, the L.A. Business Journal reported, and leases drop to around 12 months. Pedro Astorga, president of Listo Produce, for instance, said his business has gone from a $4,800-per-month five-year lease to a $6,000-per-month yearlong one.
According to Pascual Castrellon, president of the Los Angeles Produce Market Association, the 7th Street Produce Market generates $10 million in sales everyday. The 421,00-square-foot market operates in a parking and distribution yard. Atlas bought the 30-acre lot on which they sit as part of a $357 million deal in partnership with New York’s Square Mile Capital Management and San Antonio-based USAA Real Estate.
The market is part of six historic buildings, 100 shops, 15 restaurants and 1.3 million square feet of creative office space that will make up Row DTLA, Atlas’ vision for the expansive stretch of land.
The development is also welcoming the Brooklyn-based Smorgasburg market, which the current market vendors claim they did not know about, the article reported.
According to a spokesperson for Row DTLA, it was never in Atlas’ intentions to drive out the tenants.
“Nothing could be further from the truth,” he told the Journal in an email. “We are committed to a vibrant operating produce market. It is an integral part of our overall vision of Row DTLA.” [LABJ] — Cathaleen Chen