Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.
Issue link: https://westernrealestatebusiness.epubxp.com/i/732258
A nyone with even minimal knowledge of the retail market can tell you we live in the age of experience. A large part of that "experience" — whether it involves a craft beer, movie in a luxury theater or a new active- wear outfit — is its ability to feel unique, per- sonal and meaningful. It's also no coincidence that these same attributes are precisely what the Millennial population seeks when it comes to shopping centers and buying patterns. Millennials, their buying power and their unique tastes were exactly what retailers and shopping center developers should focus on, according to many of the panelists and speak- ers at the ICSC Western Conference and Deal Making event, held Aug. 30 through Sept. 1, at the San Diego Convention Center. Different Day, Different Time "Authenticity, authenticity, authenticity — that's what Millennials like when it comes to retail," said Garrick Brown, vice president of retail research for the Americas at Cushman & Wakefield and a Triple Net Lease panelist. "The common thread I see is the embrace of authenticity." Brown credited this pursuit of the new and different with bolstering everything from the casual dining environment with new brew concepts to mid-price-point companies like Shinola and Alex and Ani. In a way, Brown believed this current wave of authenticity was really just a new take on an old concept that was maybe forgotten in the department store heyday. L os Angeles is known for many things — and its ap- petite for the latest, greatest, hippest trends is one of them, which is why it's little surprise that creative of- fice space has become such a premium as of late. There may be other regions out West that arguably have stronger tech hubs, including San Francisco, Silicon Valley and Se- attle, but Los Angeles' large creative base, coupled with its desire for bells and shiny whistles have made creative office one of the hottest commodities around. CBRE Group's latest research shows the Greater Los Angeles area will experience up to 44 million square feet of creative demand in the next few years. The report at- tributes much of this growth to Los Angeles' burgeon- ing start-up population. While Seattle and Silicon Valley may be a natural spot for start-ups hoping to become the next Facebook or SnapChat, the lack of space and escalat- ing rents provide large barriers to entry for many smaller firms. Los Angeles is not historically known as a cheap real es- tate market by any means, but its overall creative culture has been a draw for start-ups that appreciate the smaller, flexible spaces alongside heavy-hitting neighbors in like- minded communities. "If you look at the amount of start-ups in this region, you realize the current and future demand potential for creative office space," says Petra Durnin, CBRE's head of research and analysis for Southern California. "While the start-up scene is much bigger in the Bay Area, Los Angeles was in fourth place last year in the number of rounds of money raised for new ventures." The LA area is currently home to about 1,900 new start- ups, many of which are focused around media, entertain- ment and software, CBRE notes. These new ventures ac- counted for about 48 percent of the $7.6 billion in funding raised in Orange County and Los Angeles since mid-2013. These new ventures aren't content to sit quietly in a tra- ditional office building, either. Instead, they want to ex- perience that innovation and inspiration Los Angeles is known for. This demand has been seen most prominent- ly in Downtown, Hollywood and Silicon Beach, which includes Playa Vista, Playa del Rey, Marina del Rey and The 11-acre Playa Jefferson campus is home to Arup, Regus, Omnicom and R/GA. It also serves as the Los Angeles headquarters for Facebook. CREATIVE OUTPUT Media, entertainment and tech tenants push creative office space in L.A. to a premium. By Nellie Day see CREATIVE, page 44 see ICSC, page 46 Property management trends. page 38 Seattle Market Highlight page 32 page 8 New Metropolis in Arizona Northern California Market Highlight page 34 INSIDE THIS ISSUE www.REBusinessOnline.com October 2016 • Volume 14, Issue 2 THE NAME OF THE NEW RETAIL GAME IS 'AUTHENTICITY' Retail design formulas that are implemented nationwide are no longer what catches the eye of today's consumer. By Nellie Day