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Monday, Sep 25, 2023

Amazon May Be Looking to Book Space in L.A.

Amazon.com Inc. announced plans last week to open its 10th bookstore in its hometown of Seattle. Los Angeles could be next.

Local brokers said the e-commerce giant has poked around several L.A. shopping districts and might have even shown serious interest in a major mall.

An Amazon spokeswoman would not discuss its plans, but Steve McClurkin, a leasing broker at EB Development in San Diego who represents Amazon’s bookstores, confirmed the e-tailer has been in the market for space in the region.

“We have been evaluating the Southern California market for a little over a year,” he said, adding that Amazon has scouted for options throughout the country.

Old Pasadena, Melrose Avenue, and Westfield Century City have been areas of interest, according to market sources.

“They were actively looking in Pasadena,” said Avison Young agent Derrick Moore, who has the listing for the former Kenneth Cole space on Colorado Avenue.

He said an Amazon representative was seeking about 5,000 to 6,000 square feet of ground-floor space a few months ago.

Newmark Grubb Knight Frank’s Jay Luchs said an Amazon representative asked several months ago to see listings on Melrose’s trendy shopping strip between West Hollywood and the Fairfax District.

Another possible landing spot is Westfield Corp.’s Century City mall, which is in the midst of a makeover projected to cost $1 billion. A broker who represents retail tenants said a Westfield representative recently indicated that Amazon would be taking space among the renovated storefronts.

A Westfield spokeswoman declined to comment on Amazon.

Amazon already holds space in other high-end Westfield properties – UTC mall in San Diego and Garden State Plaza in Paramus, N.J.

There have also been rumors, still unconfirmed, that Amazon took a look at Westwood.

Amazon Chief Executive Jeff Bezos said in a shareholders meeting in May that the company is going to open additional stores, but has been tight-lipped on details.

Retail analyst Neil Saunders of GlobalData estimated that Amazon will open several hundred bookstores nationwide in the next decade, targeting markets with tech-savvy consumers and above-average income levels, such as Los Angeles.

“It’s about creating networks of space that they can use to support the whole brand,” he said.

Part of the strategy is to continue collecting data on Amazon customers, added Joe Schmitt, a retail analyst at AlixPartners.

“The information they have now online is second to none, but their ability to link that to in-store shopping habits is a hole,” he said.

Co-Working Crumble

Real Office Centers has pulled out of its 15-year lease for 27,000 square feet at Atlas Capital Group’s Row DTLA in downtown’s Industrial District, said Ron McElroy, the co-working company’s chief executive.

“We had a bit of a glitch with the landlord and we couldn’t resolve our differences,” he said.

The space, which is partially built-out, is back on the market, listed by CBRE Vice President Jeff Pion. Marketing materials say “ownership will do a deal quickly with compelling and aggressive pricing.”

CBRE hasn’t listed the lease rate and didn’t provide how much ROC was paying. Asking rents in the Industrial District and nearby Arts District have been as high as $4 to $4.50 a square foot a month, according to brokers working in the market.

McElroy said ROC is still committed to having a presence in the area.

“We like the market. It’s just that we’ve had a hiccup,” he said.

Atlas confirmed that ROC defaulted on its lease.

Newport Beach-based ROC signed its lease in July with the option to take an additional 23,000 square feet at the 32-acre complex, which houses a produce market along with industrial buildings being converted into offices, shops, and restaurants. This spring, fashion retailer J Brand and Latino media company MiTu are set to occupy 13,000 square feet and 29,000 square feet of office space, respectively.

The Arts and Industrial districts have several projects in development that will eventually offer about 2 million square feet of office space. Warner Music Group Corp. signed a long-term lease for Shorenstein Properties’ Ford Factory, which holds 257,000 square feet in the Arts District, but that high-profile deal has yet to kick off other corporate leases.

Looking West

Developer and property manager Lincoln Property Co. is shuffling its West Coast executives as it forms division LPC West. David Binswanger, based in Los Angeles, is taking the reins of the new operation as senior executive vice president, while Rob Kane is leading the L.A. office as executive vice president. Binswanger said the move aims to create a cohesive West Coast brand for the Dallas-based company as it targets markets from San Diego to Seattle.

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

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