The commercial vacancy rate in downtown L.A.'s Fashion District has dropped to a miniscule 2 percent, lending substance to the hype about a "renaissance" in the city's urban core.
The figure was released by the Fashion District Business Improvement District (BID). Kent Smith, the BID's executive director, said the group recently completed a "door-to-door" inventory of commercial real estate within its domain to produce the data. "There's almost no vacant space," he said.
The survey also revealed a concurrent rise in commercial rental rates in the long-depressed area. Retail space is running anywhere from $1 to $10 per square foot per month, representing an increase of between 18 percent and 25 percent over 1998 levels, according to the Fashion District BID.
Showrooms at the two primary wholesale outlets for finished garments CalMart and the New Mart range from $1.75 to $2.50 per square foot, an increase of between 20 percent and 25 percent over 1998. Meanwhile, office space has also grown more expensive, leasing for between $1 to $1.50 per square foot per month; up from 90 cents to $1 in 1998, the BID's report states.
The vacancy rate for light industrial and manufacturing space is just a bit higher, at 3.5 percent.
Diverse group of businesses
The Fashion District an appellation preferred by BID principals to the more traditional "Garment District" is home to about 5,000 apparel-related businesses. These, according to the BID, are generating $7 billion in sales annually at the wholesale level and $1 billion in retail.
"We've got every fashion-related business you can have, and a unique ability to do retail at the same time we're doing wholesaling," Smith said. "This is what makes our area unique from other industrial areas in L.A."
He noted that much of the real estate activity is related to an influx of import-related companies that handle quality control and finishing. This growing industry is related to passage of the North American Free Trade Agreement in 1994.
Between 1995 and 1997, the Fashion District lost about 13,000 sewing jobs as manufacturers fled to lower-cost locations south of the border, due to NAFTA. But the lower quality standards of these foreign factories means that when the garments are imported to the United States, they have to be inspected and finished here creating a booming new industry downtown.
The loss of the 13,000 jobs was more than made up by the gain of quality control and finishing jobs Smith says there has been a net gain of jobs in the Fashion District since 1995 of 9,000. "These are higher-end jobs that we're seeing coming into the district," he said.
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