FRESH Perspectives: Exploring the Downtown LA Landscape with Brookfield's James Malone
Vice President of Leasing at Brookfield Properties, James Malone is responsible for the marketing and leasing of Class A office buildings in Downtown LA. With nearly 20 years of industry experience, the former lawyer and UCLA football player gave us an in-depth look at the current landscape of DTLA and what the future might hold for the City of Angels.
How would you describe the current LA landscape?
LA is a big region and there is a lot of movement from one market to another -– Downtown, Santa Monica, Playa Vista, Hollywood. Even within downtown, we have a lot of diverse pockets. We keep tabs on what’s going on in these markets and we look at opportunities all over the city.
The landscape in LA is changing and right now the two main areas to focus on are -- development and transportation. On the transportation front, there’s a tremendous amount of money being spent on new and improved transit lines. We are bringing these improvements to the business community and helping convert traditional car commuters into rail and subway commuters. Compared to other big cities (SF and NY), LA is still affordable and people are continuing to move to Southern California. Scalable transportation is needed so professionals throughout the greater Los Angeles area can commute to work. Business communities with easy access to transportation will thrive.
What are the challenges for the downtown landscape?
There’s been a tremendous amount of growth in the media, technology, and entertainment sectors. Downtown LA is changing; we’ve been seeing a trend of companies shrinking their footprints and becoming more efficient with their use of space. Professional services and law firms are part of this trend, and others will likely follow. There’s a growing startup culture taking foot downtown, which is bringing new tech and media employees to DTLA. This is great for the market. We are hopeful that one of these new startups might be the next Snapchat. Scalability is an important component that downtown LA can readily offer versus the suburban markets where supply is tightening and rents are rising.
Are there any trends you are seeing?
Companies and employees want new space and they want different space compared to ones built in the past. High-walled cubes and walled-in offices don’t work anymore -- they're outdated. Tenants who have leased second generation space 10 to 15 years ago want something new that will attract millennial employees. They're all competing for recent grads within the same talent pool. The goal is to offer them a work environment that is similar to what you see in modern tech companies. Virtually every tenant is moving in this direction. We are trying to stay ahead of this trend by building spaces on a spec basis to show what can be done in one of our Class A high-rises.
What are your top priorities this year?
To be trending ahead of the market in terms of occupancy. We have big goals that we’re trying to reach. Our goal is to get occupancy over 90% -- It’s currently about 85% occupied and the market is 80-82%.
Our second priority supports the first –- repositioning our assets. We have one Bunker Hill asset we’re going to undertake a major remodel on now. We are setting this into motion this year and in construction hopefully next year. Also, we are creating and adding amenities in our current buildings that appeal to new and existing tenants. We are providing tenants the amenities they want in a campus rather than just a place to work –- we all know employees spend a lot of time in their office buildings. Flexible and multi-purpose spaces are important to retain and attract top talent. The ability to work in and around the office (in the lobby or in plaza areas) is crucial and is what the millennial workforce wants.
How is this new generation shaping the workplace?
The idea of working in your office all day is becoming a thing of the past. The major landlords are all looking at ways to turn their lobbies and open spaces into productive work spaces rather than just a space you walk through to get to the elevator.
Fortunately for us, we have building complexes with beautiful open space and places for people to go and relax. We promote these spaces today by holding concerts, art events, movie screenings, etc. We want to make work-life more appealing for our tenants. We will make sure they have Wi-Fi and comforatble places to eat, drink, and hangout. We want them to be able to utilize the space for work or play -- morning, noon, and night.
You mentioned work or play, what are the advantages to living in DTLA?
More bang for the buck –- newer, modern residential buildings. More amenities like great restaurants, world-class museums, and theaters. Access to transit -- most people living downtown don’t need or want a car. They take Uber or Lyft, rent cars, or ride the train. A desire for an urban lifestyle and LA’s public transportation system is helping to create the urban work-life environment that the younger generation wants. Considering on average it's 72 degrees and sunny most of the time, living in downtown LA is a lifestyle decision that many people are adopting and enjoying.
What do you think 2020 will bring?
The skyline will look much different. With all the cranes and big mega-projects under way now, it will be interesting to see 2020 once all of the buildings under development are completed. DTLA has not seen this much growth for several decades. I think the shift in the landscape of DTLA will be as remarkable as the shift we have seen in Playa Vista and Hollywood over the last 3 to 5 years.
How many cranes do you see on a regular basis?
At least a dozen... they're everywhere you look! And every couple of weeks, you hear about another project going into the city for permits or approvals. The amount of investment in the area certainly hasn’t slowed… which is a good sign since most of these projects won’t be complete for at least 2 to 3 years.
Downtown LA is going through an exciting transformation, and the next few years are going to be game-changing for the city. It’s going to be exciting to see it happen.
Photography by: Thomas Roberts