A mixture of residential and commercial development catering to young, urban professionals seeking a “live, work and play” environment has reinvigorated Downtown Long Beach, attracting cutting-edge businesses and producing an improved office market, according to local commercial real estate brokers.
For many years, high-rise office buildings downtown have drawn businesses related to the port, the oil and gas industry and government, but more recently “creative” firms linked to the Internet, advertising and gaming have started planting roots, said Toliver Morris, leasing director for the Landmark Square high-rise at 111 W. Ocean Blvd. and other office buildings downtown.
(DLBA photograph)
The health care industry has also become a main driver of business, he said, noting that Molina Healthcare inked a deal this year to take up 73,486 square feet of office space at the 27-story One World Trade Center, expanding the company’s headquarters, located across Ocean Boulevard.
Renewed interest in Downtown Long Beach can partly be attributed to a concerted effort by Mayor Robert Garcia, the city’s economic development commission and the Downtown Long Beach Associates (DLBA), which operates on behalf of tenants and property owners of a business improvement district, to market downtown’s assets in hopes of creating an “innovation hub,” Morris said.
“We’re working hard to reach out to the young professionals around our area, whether they be creative users or others, to woo them to Downtown Long Beach to live, work and play,” he said.
Morris said that in the past three months he has given tours to creative tenants looking to take up a total of about 100,000 square feet of office space in downtown while in previous years it had been more difficult to attract such business clientele.
A recent push by developers and investors to upgrade the exteriors and interiors of office buildings to attract creative office users has also helped lure businesses to Downtown Long Beach, he said, adding that ownership of nearly 70 percent of downtown office buildings has changed hands in the past two years.
“Enthusiastic developers and investors have come into Downtown Long Beach and are spending money to upgrade old, tired buildings and make them something unique, different and exciting,” Morris said. “We’re in a huge renaissance in downtown.”
Businesses are attracted to Downtown Long Beach mainly because it offers oceanfront property and an urban environment at a lower price than competing cities, such as Santa Monica and Newport Beach, he said. Creative firms are also drawn to the “authenticity” of Long Beach, Morris added.
“Creatives want authentic,” he said. “They want natural light, exposed-duct ceilings, operable windows, concrete floors and an outside area that’s Wi-Fi enabled. They want bike friendly and dog friendly. They want all of those elements, and that’s what we’re producing.”
Greg Gill, president of Lee & Associates’ Long Beach office, which represents owners of office buildings and invests in properties downtown, said Downtown Long Beach is still considered a “bargain” compared to other urban areas in Los Angeles and Orange counties.
In addition to being centrally located in Southern California with easy access to the 710 Freeway, Downtown Long Beach offers “excellent buildings with ocean views and good parking” as well as a multitude of hotels to host business clients, he added.
(Long Beach Business Journal photograph by John Robinson)
The city’s Downtown Plan, a set of zoning guidelines put in place to fast-track development, lure private investors and facilitate unique architecture, has also helped spur economic development, Gill said, adding that new dining and entertainment options along with improvements to the The Promenade, Pine Avenue and other areas have generated a lot of interest.
Along with new restaurants and retail options, such as The Pike being rebranded as an outlet mall and new developments, including adaptive reuse projects that involve converting aging office buildings into residential complexes, have caught the attention of business professionals looking to work and play where they live, Morris said.
The recently opened Edison Lofts at 100 Long Beach Blvd., for instance, now offers more than 150 residential units after the high-rise once owned by the city was transformed from office use. More than 1,500 new residential units are expected to come online downtown in the next 18 months, he said.
Office to residential conversions are expected to tighten up the downtown office market, which has long suffered from high vacancy, Morris said. Downtown Long Beach’s vacancy rate, which has already dropped about five percentage points to 15 percent, is likely to fall to single digits within a little more than a year, he said.
“We’re going to go from an unhealthy office market to a very healthy office market pretty much in record time,” Morris said. “I think that people will get excited about it.”