LA landlords eye office-to-housing conversions
Around 2,300 properties are prime for redevelopment
Los Angeles office cubicles could be swapped for walk-in closets and induction stovetops.
More landlords are considering converting offices into condos or apartments as companies cut back on leases as they permanently adapt to remote work, the Los Angeles Times reported.
While most haven’t acted, candidates for conversion are eying uncertain demand for office space as Covid-19 wanes. The Los Angeles office population hovers at 43 percent of what it was before the pandemic, according to Kastle Systems, which tracks entry card swipes.
Think tank Rand Corp. identified 2,300 underused office and hotel properties in Los Angeles County that could be converted to housing. Most of them are older office buildings with big chunks of unrented space, according to a March study.
If all the underused buildings were turned into homes it would add up to 113,000 units, Rand said. That’s between 9 percent to 14 percent of the housing needed over the next eight years to meet demand.
Converting an existing building to a new use is more environmentally sustainable than building a new one, but the price of acquiring office buildings can be a barrier to conversion, Rand said.
Although it can cost millions to convert a high-rise office to apartments, it’s cheaper than erecting a new building from the ground up. Former office buildings also tend to come with ample parking and other large spaces that can be put to new uses.
But in neighborhoods with high property values such as West Los Angeles, it’s difficult for housing developers to afford to buy an office building, pay to convert it to housing and then collect high enough rents to turn a profit.
Downtown Los Angeles, the city’s oldest office market, presents more opportunities. Nearly a third of the 37,000 new housing units created since downtown’s residential renaissance kicked off in 2000 were created through adaptive reuse of mostly old office buildings.
Some neighborhoods such as Koreatown have concentrations of tall, aging office towers suitable for housing but many other candidates are less obvious, architect Karin Liljegren said.
“There are opportunities everywhere,” Liljegren, who specializes in conversions, told the Times. “It’s just that people don’t have the vision.”
Jamison Properties and its realm of companies had that vision. In the past decade, the Koreatown-based developer founded by Dr. David Lee has converted seven office buildings to residential use for a combined 1,200 units, nearly all of which are leased. More makeovers are in the works.
The office-to-residential conversions include the former headquarters of U.S. Borax at 3075 Wilshire Boulevard, across from Southwestern Law School, in Koreatown. Jamison converted it to the Westmore Apartments in 2013. Its 127 units were leased in just three months.
Jamison also converted a former Texaco headquarters at 685 Wilshire Boulevard in Koreatown. Now known as the Crosby, it has a rooftop swimming pool with cabanas, fitness center, fire pits and a karaoke room. Monthly rents start at $2,250 and top at $6,500 for a penthouse.
It just filed plans to convert the Pierce National Life Building, an office fixture in Koreatown for a half century, into 176 apartments at 3807-3815 Wilshire Boulevard.
— Dana Bartholomew