CALIFORNIAMART LOOKING FOR A BUYER, BUT SOME TENANTS NOT HAPPY
The CaliforniaMart is up for sale, but the new owners of the boxy hub of the downtown apparel industry will have to contend with a high vacancy rate and a dowdy image that has left some tenants downbeat about working out of the building.
Company officials who run the elephantine apparel mart concede that 25 percent of the showrooms are vacant. Real estate insiders estimate it is slightly higher, at about 28 percent.
A walk through the mart’s 13 floors, encompassing three buildings and nearly 2 million square feet, reveals scores of darkened and empty showrooms along the hallways. Entire sections are vacant.
Susan Scheimann, president and chief executive of CaliforniaMart, explained that many of the spaces are left open to accommodate sales reps needing temporary showroom space during the mart’s various trade shows.
“We have pockets of vacant space for temporary users,” Scheimann said. “The building looks more vacant than it is.”
And not everyone is complaining. “I’m quite happy,” said one sales representative who has been at the mart for 25 years. “There is always turnover and transition (of clothes lines and sales reps). That’s the business.”
But the empty space creates a ghost town effect on some floors, prompting tenants to complain there is little foot traffic in between trade shows.
“We still have a showroom there, but I prefer to work out of the factory,” said Shani Davis, the sales representative for Bisou Bisou, a line of contemporary sportswear whose showroom is located on the fifth floor, which is nearly 100 percent occupied. “There is hardly any foot traffic at the mart except when there are fashion shows.”
Competition next door
Some tenants have gotten so discouraged that they have moved across the street to the trendier New Mart, a historical landmark. This smaller structure, built in 1928, has large windows with loft-style showrooms, exposed ceilings and a bohemian ambience that reminds many of New York’s Soho District.
The 12-story, 250,000-square-foot structure is 100 percent leased to salespeople representing contemporary men’s and women’s fashion lines. In addition, there are 20 people on the waiting list, said the building’s owner, Joyce Eisenberg Keefer, who donates the lease money to various charities.
Inside Avrom Geneles’ showroom, where he represents 15 different women’s wear lines, the high ceilings and white-washed walls highlight the contemporary art he and his partner have hung on the walls.
“I like the spaciousness of the showrooms, the high ceilings and the big windows, which give the place an ambience the other building (CaliforniaMart) doesn’t have. It makes our merchandise show up better,” said Geneles, who had a showroom at the CaliforniaMart for three years before moving to the New Mart two years ago. “We’re expecting our sales to double this year.”
On the 11th floor, Kathy Walker shares an airy showroom with three other designer reps who have carved out separate offices with red brick lined walls. Each has a view of downtown L.A.’s skyscrapers and the hills beyond.
“This is an awesome building. This is the place to be,” Walker said.
The CaliforniaMart is owned by Equitable Life Assurance Co., which has on-site management. But tenants complain it takes forever for them to make a decision. “The CaliforniaMart people are extremely nice, but you can’t get anything done because you have to go through so many people,” said Frances Harder, an associate professor of fashion design at the Otis School of Art & Design, housed inside the CaliforniaMart.
She tried to get free office space for her recently developed Fashion Business Incubator, set up to help young designers establish new companies. With all that vacant space, you would think they could find a free corner for her, she said. But the mart management wanted to charge her for office space. She made the same request across the street at the New Mart and quickly was given a free space.
Renovation may be in cards
The CaliforniaMart has been run by Equitable Life since 1994, when the company foreclosed on a $250 million loan taken out by the Morse family, which built the mart in 1964. The original building had 700 showrooms. Subsequent additions added another 500.
When the insurance company took over, the building was 33 percent vacant, and several tenants were threatening to move out and take up space at the Pacific Design Center. Mart management made $14 million in interior design improvements in 1996, which paid off. The tenants remained.
Equitable is asking for at least $100 million for the building and surrounding lots, according to Carl Muhlstein, a Cushman Realty Corp. broker representing the insurance company.
Real estate experts say that whoever buys the building may need to make more improvements. Such renovations aren’t unusual for showrooms; the Chicago Apparel Center used to have 12 floors of showrooms, but in recent years it has consolidated to three floors of showrooms with the remainder of the building a mixed-use facility with tenants such as Ameritech and the Fox Broadcasting network.
The Pacific Design Center in West Hollywood has also gone commercial, setting aside space for creative tenants like ad agencies and graphic designers.
“What they should do is keep buildings A and B full and develop building C into multi-use offices or spaces,” suggested Mark Weinstein, who owns 10 garment-district buildings that are 90 percent full. “Building C is like Siberia. It creates a bad feel for people in those areas.”
