Downtown players are trying to take advantage and return Broadway, home to the city’s premier shopping destinations through the 1930s and 1940s, to its glory days. And demand for space in the corridor – along with hundreds of millions of dollars in building renovations – have helped double and sometimes triple rents in the last five years, according to brokers.
Despite the price surge, the area still appeals to retailers that are drawn to the area’s changing demographics, which are skewing toward professionals with disposable income. A typical downtown resident is a single, 38-year-old woman who earns $98,000, according to 2017 survey by the Downtown Center Business Improvement District.
“This is what I would say is a massive transformation,” said Steve Needleman, owner of Anjac Fashion Buildings, a portfolio of real estate holdings started in the 1970s by his late father, a garment manufacturer. Needleman owns five buildings along the stretch with a total of 30,000 square feet of retail and 500,000 square feet of residential and office space. He’s turned down retailers offering high rents.
“I am a little bit more picky rather than just looking at the strict economics,” he said.
“Vans is the perfect example,” Needleman added. “It was bringing something to the table, like Apple; both of them have a concept of a social gathering space. A place where retail, it’s a social experience, it’s not just facing merchandise on the shelf.”
Costa Mesa-based Vans ultimately made the cut and will take over approximately 8,700 square feet at the Anjac-owned Old Singer Sewing Building at 806 S. Broadway. The company wouldn’t provide details about its store plans, but Apple, which is planning on restoring the Tower Theatre, has embraced a strategy of creating “modern-day town squares” in stores. Needleman’s other recently signed tenant, Korea-based eyeglass designer Gentle Monster, is known for its surreal, sometimes immersive art exhibits.
Broadway’s bloom has been a long time coming, but it hasn’t been without bumps in the road. Since 2008, the revitalization of Broadway’s retail corridor and historic theaters has been part of a relentless redevelopment campaign, Bringing Back Broadway, by Councilman Jose Huizar. The program is dormant, and after FBI agents raided Huizar’s office last year as part of a probe into City Hall’s fundraising from downtown developers, there’s no indication it will be revived. Night on Broadway, a weekend event put on by Huizar’s office, was canceled this year after the raid. But the momentum remains underway.
Many trace the retail boom to the Ace Hotel’s 2014 opening. The trendy hotel in the former United Artists Building spurred a small surge of boutique shops in large part thanks to the work of Tungsten Properties Ltd., a brokerage that reshaped the neighborhood by bringing in retailers like Aesop and OAK.
Then-retail development director for Tungsten, Jonathan Schley, who is now at CBRE, said there was an idea then that L.A. is so massive you need to give people a reason to show up.
“We are trying to keep Broadway real,” Turf said. “We don’t want to see mall brands on Broadway.”
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