Playa Vista’s less trendy little sister is getting a modern makeover, with a name change to match.
An area known as Corporate Pointe – a business park in Culver City next to Playa Vista with about 1.3 million square feet of office space – is getting dubbed “Culver Pointe” as property owners work at updating stodgy offices built in the 1980s. The goal is to offer creative office space with concrete floors and exposed ceilings, a style increasingly in vogue in the business world.
“The word ‘corporate,’ from every direction, is just a huge negative,” said Brad Feld, a vice chairman at Newmark Grubb Knight Frank who represents two of the buildings. “Corporate office space is done. Creative office space is the new traditional office space.”
The name change would come as property owners are banding together to boost their fortunes in the tiny submarket that is benefiting from a burst of demand in surrounding Silicon Beach markets Playa Vista, Culver City, and Santa Monica.
Playa Vista in particular has generated attention as a hub for star technology companies including Google and Facebook.
Monthly office rents in Playa Vista are closing in on $5.50 a foot, roughly double the average rents in Corporate Pointe, which is being positioned to serve as an attractive alternative for companies on slimmer budgets. To draw them in, property owners, including New York Life Real Estate Investors, Olive Hill Group, and Vornado Realty Trust, are in the process of multimillion-dollar renovations of lobbies, courtyards, and offices in the eight buildings that make up the complex. (A ninth is under construction.)
As a result, Corporate Pointe rents have climbed significantly in the past year, with landlords citing jumps ranging from 25 cents to a full dollar for creative space.
“There is an insatiable appetite for creative office space, and that’s driving rents up and filling vacancies at a very rapid pace,” Feld said.
This physical transformation will ultimately make more of a difference than the new name, said Ian Strano, executive vice president at NAI Capital.
“It’s merely branding and a way to downplay that the area has several high-rise buildings, built many years ago, with very boring architecture,” he said.
Most of Corporate Pointe was built in the late 1980s, a time of mass office construction nationwide that later proved to be overdone, especially as financial markets tumbled in the early 1990s. Located in a remote pocket of Culver City near the intersection of the 90 and 405 freeways, without the prestige of submarkets such as Century City or Bunker Hill, Corporate Pointe suffered during every bump in the economy.
It wasn’t until a couple of years ago, after the region rebounded from the recession and Silicon Beach began to boom, that investors keen on improving Corporate Pointe began to show up.
New York Life purchased 400 and 600 Corporate Pointe for $131.3 million in 2015. Olive Hill purchased 200 and 300 Corporate Pointe in May for $65.6 million. Both are embarking on substantial renovations to build so-called creative spec suites.
“The owners now feel like they don’t want to get skipped over,” said Michael Cho, Olive Hill’s president. “They don’t want this progress and this change to skip over us into Beverly Hills, into Century City, or even down into El Segundo.”
His company is spending $50 to $70 a square foot to build creative spec suites.
New York Life is undertaking similar renovations, emphasizing exposed spiral ducts as well as glass doors and walls.
An important part of the strategy is to make creative space available for tenants who want an immediate move-in, according to Feld, the company’s leasing agent.
“A tenant walks in and goes, I can’t find this anywhere, I’ll pay a premium, I’m not going to fight you,” he said.
The activity might lead to another Corporate Pointe transaction. A source familiar with Vornado’s 800 Corporate Pointe said the property is on the market.
Vornado representatives did not return calls seeking comment, but the time might be right. Ares Management signed a 10-year, 97,000-square-foot lease at the 800 building last year at a monthly rent of $3.40 a square foot, according to Jones Lang LaSalle, one of the highest rents at Corporate Pointe.
Another big sign of change is IDS Real Estate Group’s C3 at Culver Pointe. The seven-story building with 278,247 square feet, set for completion around June, will feature tall ceilings, patios, loft space, and catwalks that connect upper levels of the building to a parking structure.
Monthly asking rents are $4.35 a square foot, said IDS Senior Vice President David Saeta, who is pushing the “Culver Pointe” rebranding.
“It sends a message that there’s a new game in town with a new product design,” he said.
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