City of Industry Tailor Fit for Apparel Company

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New York fashion company Michael Kors Holdings Ltd., whose namesake designer creates and sells high-end women’s and men’s apparel and accessories, has expanded in the City of Industry.

The company signed a lease last month for the building at 3931 Workman Mill Road, about 305,000 square feet. The building is one of five that make up Gateway Pointe Industrial Park, a state-of-the-art warehousing and distribution facility located just off the 605 freeway and south of the 60 freeway. The company, which had previously leased more than 715,000 square feet in two buildings at the industrial park, will occupy the majority of the 1.6 million-square-foot facility.

Jamul-based landlord Strategic Property Advisors Inc. completed construction of the 70-acre industrial park in 2006.

David Hasbrouck, Stuart Milligan and John McMillan of Cushman & Wakefield of California Inc. represented both the tenant and landlord in the deal.

Green Lease

Formosa Studios, a postproduction company that does audio work for films, TV and video games, has signed a short-term lease for editing space in the Green Building at the Pacific Design Center.

The company signed a six-month lease earlier this month with New York landlord Cohen Bros. Realty Corp. for 4,300 square feet at 8687 Melrose Ave.

Seth Wellisch, a senior vice president in the West L.A. office of tenant brokerage Cresa, represented Formosa in the deal.

He said the production company, which remains headquartered in West Hollywood at 1041 N. Formosa Ave. on a studio property known as the Lot, had grown beyond what landlord CIM Group Inc. could readily accommodate.

Jeff Lasky, senior vice president for Cohen, said Formosa came to him after running out of editing space at its existing headquarters, where he said media company Oprah Winfrey Network is negotiating for space.

“They were squeezed out of Formosa and we had ready-to-go space,” he said. “These guys are the first tenant in that business that has taken space here, but we feel like there’s an opportunity to do more leases like this.”

In addition to the short-term space Formosa leased at the Pacific Design Center, the production company has an aggregate of about 35,000 square feet in two offices in West Hollywood and a third in Santa Monica.

Wellisch said Formosa will probably want to consolidate its disparate offices under one roof in the future.

“They haven’t had the time to say, ‘Hey, look, we want to consolidate everything,’” he said. “That’s kind of the next step, the long-range plan for their business.”

Condominium Costs

As more and more people begin to seriously consider downtown Los Angeles an attractive place to put down roots, the few condos for sale in the area have become increasingly expensive.

New construction condos, as might be expected, have been the most elusive and expensive. Sale prices for new condos in the area shot up to an average of $622 a square foot in October, a 14 percent increase over the same period a year ago, according to data released last week by San Francisco urban residential marketing and research firm Mark Co. Resale condos also saw sale prices soar, rising 28 percent year over year to $478 a square foot. Countywide, the median sales price in September for condominiums was $306 a foot.

Erin Kennelly, senior director of research for Mark, said limited inventory of both new construction and resale condos has been a driving factor in rising prices.

“Although the pace of appreciation has slowed in the second half of 2013, low inventory and strong demand continue to push prices higher in downtown Los Angeles,” Kennelly said.

Only 20 new condo units – half of them at Ritz Carlton Residences at LA Live – were available for sale in the area last month, significantly less than inventory levels of past years. In 2007, more than 1,900 new condo units were available for sale downtown. That number dwindled to 248 last year, then finally to a mere 20 last month. Only 68 condo units are under construction to feed demand in coming months.

New apartments, on the other hand, are more abundant, according to Mark’s data; about 4,200 apartment units are under construction.

Alan Mark, founder and president of Mark, said developers would do well to consider converting for-rent apartments into condos to capitalize on demand.

“The cost to convert a rental apartment to a condo is frequently less than new construction or other types of conversions,” he said.

Staff reporter Bethany Firnhaber can be reached at bfirnhaber@labusinessjournal.
com or (323) 549-5225, ext. 235.

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