Wildfires Prompt Santa Monica Office-to-Schools Conversion

A swank office building in Santa Monica owned by JPMorgan has some lively new tenants alongside the likes of Amazon.com, Oracle and AMC Networks: kids.

Landlords in the upscale city have converted a combined 200,000 square feet of offices to house five K-12 schools displaced by the Pacific Palisades fire, the Los Angeles Times reported.

The schools have provided a windfall for office buildings still struggling to bounce back from a pandemic shift to remote work.

JPMorgan welcomed Calvary Christian School and St. Matthew’s Parish School to the Water Garden. Terms of the deals were not disclosed.

“It wasn’t on my bingo card this year to be doing school leases, but here I am — and you roll with the times,” Alex Cameron, Los Angeles regional director at Boston-based developer BXP, told the Times. The company houses Village School and Seven Arrows Elementary School in two of its Santa Monica buildings.

Cameron said his company’s offices at the Colorado Center and Santa Monica Business Park have few vacancies, unlike some other landlords. It took creativity to squeeze in the new school tenants.

“It could best be described as a collective triumph,” John Evans, head of Village School, which relocated its 250 students to Colorado Center, told the Times. The new K-6 digs don’t have permanent walls, requiring temporary dividers.

He said other tenants at Colorado Center, including Hulu and Roku, have offered to help.

“They’re [asking], ‘What can we do for your graduation? Would the kids like to have a career day over here?’” Evans told the newspaper. “It’s just been overwhelming.”

But not every landlord in Santa Monica’s 8.4-million-square-foot office market has been as fortunate. The office vacancy in the fourth quarter was 31 percent, up from 25 percent a year earlier, according to JLL.

One gaping hole is the vacant former Sears building near the Third Street Promenade. But it’ll soon be packed with nearly 2,500 teens, as Palisades Charter High School is slated to reopen there this month.

The building’s owners, New York-based Seritage Growth Properties and Atlanta-based Invesco Real Estate, which poured $50 million into mixed-use upgrades since the 100,000-square-foot Sears closed in 2017, had been unable to find a tenant since the pandemic.

Enter Pali High, whose Pacific Palisades campus was 30 percent damaged or destroyed in the January fire.

The high school signed a six-month lease for the former Sears building, renamed Mark 302, at 302 Colorado Avenue. The price, including construction: $11 million, the bulk of it coming from the school’s insurance, Pamela Magee, Pali High’s principal, told the Times.

Eric Dinenberg, chief operating officer for Seritage, said the company “appreciates being part of the fire recovery effort,” adding that the former Sears property is an “architectural gem,” whose updates “showcase its flexibility.”

— Dana Bartholomew