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Friday, May 27, 2022

Shoemaker Yet to Find Footing on Abbot Kinney

Venice’s Abbot Kinney Boulevard is famous for the assortment of unique boutiques and eateries lining its eight blocks. Many are independent brands, such as clothing designer Open the Kimono or All Things Fabulous, which manufactures clothes downtown.

But several chains have taken up residence in recent years, including Toms Shoes, Warby Parker, Roots and, most recently, a tenant with a massive global footprint: Adidas America Inc.

The retail unit of Germany-based Adidas AG plans to open a store there on July 13, Adidas spokeswoman Maria Culp said. The venue would add to the shoemaker’s 2,686 retail outlets worldwide, according to a company filing.

The space at 1349 Abbot Kinney is roughly 6,000 square feet and slated to be a showcase for the “Adidas Original” concept, said the landlord’s leasing broker, Newmark Knight Frank Vice Chairman Jay Luchs.

Some locals have voiced concern that Adidas could usher in a flood of corporate tenants willing to pay high rents and make it tough for smaller competitors to keep up.

Luchs said he doesn’t anticipate sweeping changes.

“There’s no way it’s going to be followed by 10 companies that are going to push out tenants,” he said, noting that the retail industry in general is in a state of flux, with a number of big and long-standing chains feeling as much heat as anyone.

Monthly rents on the boulevard range from $14 to $16 a square foot, said Luchs, who declined to provide the rate for the Adidas space.

He also noted that the landlord, New York-based KLM Construction Corp., shunned higher rent offers from other prospective tenants, opting for Adidas as the best match for Abbot Kinney’s existing retail mix.

George Francisco, president of the Venice Chamber of Commerce, said he has a neutral viewpoint on the types of stores coming to Venice.

“As long as you’re promoting active street life, I think it’s positive,” he said. “What’s not positive is where you take street activity and close it down.”

Adidas might have started off on the wrong foot with locals when it mounted a sign declaring “Defining Venice” – taken as a slap in the face by some residents and business owners in the area, where locals have long nurtured Venice’s funky, independent vibe.

Shortly after, someone changed the sign to read “Defiling Venice,” Melanie Camp, editor of Venice newspaper Yo! Venice, said via email. The edit, she said, “pretty much sums up how neighbors feel about the arrival of any chain store.”

Betting High on Cal Plaza

Beacon Capital Partners and Madison International Realty sold their Bunker Hill office skyscraper at One California Plaza last month for $459 million, or $441 a square foot.

No such deal for CIM Group, which pulled the neighboring Two California Plaza off the market after seeking about a similar price – at least $400 a square foot, or $458.6 million, according to a source familiar with the property.

Rising Realty Partners and Colony NorthStar Inc., both based downtown, purchased the 1 million-square-foot One Cal Plaza, according to market sources. Public records confirm the price for the deal, which closed June 7. Rising declined to comment, and Colony did not respond to inquiries.

Although several investors circled the 1.4 million-square-foot Two Cal Plaza in early May, when offers were due, the asking price was likely too high to justify buying a building with significant vacancies.

The property is about 19 percent vacant, which leaves an estimated 260,000 square feet available, according to data service CoStar Group Inc.

Moreover, not all the leased space is occupied. City National Bank signed a deal in November for 11 floors but doesn’t plan to move in until next year, CIM said in a press release.

CIM, based in Mid-Wilshire, declined to comment.

One Cal Plaza, on the other hand, is less than 10 percent vacant, with 90,462 square feet available, according to CoStar.

Beacon and CIM both began marketing their buildings early this year after buying the respective ground leases in November from CRA/LA, the former Community Redevelopment Agency for the city of Los Angeles. Beacon purchased the property beneath One Cal Plaza for $33.4 million, while CIM picked up the parcel under Two Cal Plaza for $70 million.

Staff reporter Daina Beth Solomon can be reached at dsolomon@labusinessjournal.com or (323) 556-8337.

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