Greetings From Los Angeles

The Colliers Government Solutions team represents owners of government-leased properties nationally. So, we travel a lot. This slideshow profiles my recent trip to Los Angeles, California. (Use arrow buttons to advance slides)

• Approach to LAX

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  My colleague, Jarrett Morrell, took this photo of downtown L.A. (the cluster of high-rise towers in the distance) from the window of his plane just before landing at LAX. There are other dots and nodes of high-rises in Los Angeles—most notably in Century City—but the downtown provides the most recognizable city center. The vast metropolis is spread out upon the L.A. basin, which geologists regard as huge bowl of sand. The mixture of prehistoric sediment extends downward more than 30,000 feet before hitting solid rock. In the event of an earthquake, the effect is like shaking a bowl of jelly, thus explaining why seismic structural design is especially important.

• Federal Leases

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  The greater L.A. area (as loosely defined by me) contains 178 federal leases in 152 buildings. These leases total about 4 million RSF. Not a ton of federal space when you consider that L.A. is the second largest metro area in the U.S., though our figures don't count space owned by the U.S. government. Want some more fast facts? There are just 35 buildings in the L.A. area that we define as primarily government leased (i.e. >=75% leased by the federal government). The average size of these buildings is 39,052 RSF and the average total and firm terms remaining on their leases are 66.57 and 29.23 months, respectively.

• Downtown LA

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  As in most metro areas, the city center is home to much of the federal tenancy. Downtown L.A. is home to several large leases but no huge ones. Interestingly, there are no big fully-leased government buildings either. Four of the largest GSA leases are shown in this photo: 1) 725 S. Figueroa Street, 124,038 SF leased to GSA; 2) 915 Wilshire Blvd, 155,0454 SF leased to GSA; 3) 611 W. 6th Street, 193,112 SF leased to GSA, and; 4) 606 S. Olive St, 133,773 SF leased to GSA.

• Helipads

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  Take a closer look at the Los Angeles skyline and one thing you notice is that most high-rises have a helipad. This is due to a municipal fire code dating back to 1974. Since then, every building has had to be capable of landing a helicopter carrying fire-fighting equipment. While the code may make the buildings safer, architectural critics note that the universally flat-topped design of its buildings has made the Los Angeles skyline pretty boring.

• I'm Updating My Life Insurance

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  As I observed in my “Greetings From Fresno” slide show, California is chock full of warning signs meant to helpfully remind us that our exposure to virtually everything carries some very remote possibility of cancer or even “reproductive harm” (I do not like the sound of that!). My hotel deftly addressed the panopoly of threats with this sign at the entrance.

• New Courthouse Site

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  This site, a vacant 3.6 acre lot (comprising the entire city block delineated by 1st Street, Broadway, 2nd Street and Hill Street) will be home to a new 550,000 SF federal courthouse. SOM and Clark were awarded the $318 million design-build contract late last year and this photo (skillfully taken from the dashboard of my rental car) is evidence that work is just now beginning. Clark has erected a fence and installed a construction trailer, though there is very little equipment yet on site. The building is expected to be completed in 2016.

• The $60 Million Apple Store

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  I recently wrote a blog article featuring Jordache Enterprises, an Israeli investment firm that earlier this year purchased two GSA-leased buildings in Washington, DC, each in the low 5% cap range. Before their foray into government-leased properties they purchased this 17,550 SF Apple Store on Santa Monica's 3rd Street Promenade for $60 million--a reported 3.9% cap rate. With these purchases on both coasts, Jordache was clearly willing to pay a dear sum for stellar credit. We can debate whose credit is better--Apple's or the Federal Government's--but the pricing of this building suggests that the Apple lease was more attractive (note to GSA).

• New York?

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  Nope. This is the “New York Street” backlot at Fox Studios, located adjacent to our hotel. Walking around Fox Studios we were reminded that, by contrast to the entertainment business, federal leasing is pretty boring.

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