In the heyday of corporate construction a half-century ago, U.S. Borax Inc. opened its headquarters in a nine-story concrete tower in what is now Koreatown. Today, what was once a monument to industry is an apartment building.
The conversion of the building, at 3075 Wilshire Blvd., was among the first in a new wave of projects that are transforming aging offices into upscale residences, capitalizing on L.A.’s demand for housing.
“The markets for renting in L.A. have gone up like crazy in the last few years,” said Garrett Lee, president of Jamison Services Inc. in Koreatown, which did the 3075 Wilshire project in 2013. “It finally made financial sense from a profitability standpoint to invest in apartments, whereas 10 years ago, it never did.”
The Borax property, now a 100-unit apartment building called the Westmore, offers a fitness center, a lounge with a pool table, and views of the Hollywood sign. Rents command between $2.40 to $2.66 a square foot – higher than the $2 a foot it used to bring in as a bare-bones office.
The conversion was so successful that Jamison is now tackling nine others in Koreatown – and it’s not alone. Other developers have taken on similar projects in West Hollywood, Mid-Wilshire, Echo Park, and Long Beach.
“We have a severe unit shortage. In that context, it’s a pretty safe bet to build housing,” said Raphael Bostic, interim director of USC’s Lusk Center for Real Estate. “If you can get a big building and get a lot of units, that puts you in a good position for a nice return.”
The conversions come as commercial hubs that were once dead after dark are attracting residents with hip restaurants, coffee shops, and nightlife, mirroring the renaissance that has taken place in downtown Los Angeles over the past decade.
“It’s been successful downtown, and now we’re seeing it spread to other parts of the city,” said Tyson Sayles, a principal at Long Beach-based Ensemble Real Estate Investments.
The experience downtown proved there is value in turning decades-old offices into housing. Aided by L.A.’s Adaptive Reuse Ordinance in 1999, developers could spruce up downtown’s aging, empty buildings without typical zoning and code restrictions that would have made conversions impractical, if not impossible. Especially appealing to developers was the opportunity to offer more units per lot size than would be allowed in new structures.
Developer Tom Gilmore seized on the ordinance to transform a number of early 20th century banks and offices into lofts with historic character. His success paved the way for more conversions, and downtown now has more than three times the number of housing units it had in 1999, according to the Downtown Business Improvement District.
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