Century City in 2020 will have more creative firms, more Millennials and nightlife to cater to a more freewheeling domain, at least according to the optimistic industry leaders working behind the scenes.
Commercial real estate media company Bisnow brought together Century City’s major leaders with more than 250 attendees on the 32nd floor of the Century Plaza Towers June 17 to discuss the fate and fortune of the area, along with the evolution occurring today.
From topics in office, residential, retail, hospitality, and health care markets, CEO’s and presidents of Century City’s companies discussed the different ways the locale can emerge a true live-work-play destination in the next five years.
It is clear Century City is a diverse beast ready to attack Los Angeles and the global marketplace; what isn’t clear is how it is going to happen.
The biggest obstacle facing Century City is the dearth of parking and transportation.
“We’ve got all the ingredients, they’re just not stuck together as well as we’d like them to be. We don’t have the people doing what they need to be doing yet,” said Allen Matkins partner Tony Natsis, who moderated the panel.
More Century City Construction
The two biggest developments that will help facilitate Century City’s growth are JMB Realty Corp.’s 5.5-acre lot and Westfield’s $800 million renovation.
JMB is currently marketing the site worldwide and have already received offers from 22 different countries, having just gone to market in the same month, real estate broker Laurie Lustig-Bower of CBRE Group Inc. told the audience.
Before the housing market crash, she explained, JMB had already received city approval to build 483 residential units within three high-rise towers, with two of the towers slated to be amongst the two tallest residential towers in the Western U.S.
But once the recession hit, JMB tabled the residential plans and acquired office entitlements for a 37-story office tower.
With offers due July 10, the vacant lot at 1950 Avenue of the Stars is slated to become West L.A.’s premier luxury condominium complex.
As for the Westfield Century City shopping center, Chamber of Commerce CEO Susan Bursk said the $800 million re-investment would bring in 70 new restaurants and shops, scheduled for completion in 2017.
As some shops and restaurants will come back after construction and some will relocate, two high-profile additions are for sure: Mario Batali’s Eataly will take Macy’s spot and Nordstrom will leave the Westside Pavilion after 30 years to move in to Century City.
With that, Westfield will have the three major department stores – Bloomingdale’s, Macy’s and Nordstrom – and a beer and wine garden on the roof of Eataly, Bursk said.
Can Century City Sustain the Creatives?
For a 10 million square foot office market, Century City has had an ‘amazing’ last several months with increased rental rates and low vacancy rates at about 13 percent, according to Stan Gerlach, senior vice president of CBRE.
And by the end of the year, Century City will hover below 10 percent vacancy rate in office space, Gerlach noted.
Brian Okrent, executive director of JP Morgan, reinforced Gerlach’s claims and added that Century Park is 100 percent leased, while the Century Plaza Towers remain 90 percent occupied.
And Nadine Watt, president of Watt Companies, announced that Watt Plaza successfully re-financed their space at a 15-year rate.
“We are seeing a lot of the standard lawyer tenants, but we are getting a lot of creative, some entertainment, some consulting,” Watt said, adding that they’ve courted some tech companies to no avail.
Though Gerlach said Century Plaza Towers may lease out to a 140 square foot unnamed creative tenant, Bisnow reported the tenant is global marketing firm Interpublic, which will leave its spot at the Pacific Design Center for 1840 Century Park East.
Gerlach, Okrent and Watt all agreed that the market’s evolution depended on housing the tech companies that now line Santa Monica and Playa Vista.
“What we’re seeing in terms of workplace of the future is, Century City is still the central business district of the L.A. basin,” Gerlach said. “You’ve got the movers and shakers here. You’ve got the studios, investment bankers, law firms. So those tenants will always remain a magnet for additional law firms to consolidate Century City for attention and recruiting.”
While parking will persist in being Century City’s biggest challenge for new types of tenants, a cultural chasm poses another problem between the creative and technology tenants and the traditional businesswomen and men.
Okrent of the Century Plaza Towers foresaw a strained environment when mixing “the suits and ties” with “the T-shirts and flip flops.”
“A lot of these traditional tenants don’t want to ride in the elevator, nor do they want their client to ride in the elevator, with someone dressed in flip-flops or who brings their dog up in the elevator,” Okrent said.
Natsis compared Century City’s rapid rental rate growth and shrinking vacancy to that of bigger urban markets like San Francisco’s SOMA and Seattle’s Southlake Union. Their solution was to build vertically and quickly.
But Watt offered a different way to draw the creative and tech tenants.
“I think one of the issues is that Century City has yet to become a 24/7 city, and to attract the Millennials it has got to be more 24/7,” she said, likening the revitalization of Downtown to what Century City should do.
Finally, Chamber of Commerce’s Bursk added that the emergence of the Purple Line subway station will likely push more diverse tenants toward Century City, but not until 10 or 12 years down the line.
“In the interim, there are a lot of things going on, specifically with the Expo Light Rail,” Bursk said.
Transportation management organization Commute 90067 is also using vanpools and shuttles to integrate the Culver City Expo station into Century City.
Housing and Health on the Skyline
With around 7,000 residents in Century City, most north of Olympic Blvd. and south of Pico, developer Ken Kahan, CEO of California Landmark, said his firm is under construction on 10 estate homes in Century Woods.
This, along with what Related Cos. did with the Century and what JMB is set to accomplish, will change the demographic of Century City’s population of Baby Boomers.
For the Millennials, Kahan plans to develop Dunn Apartments, an 86-unit project complete with a 2,000 square foot rooftop deck.
Bursk also announced the partnership between UCLA and Cedars-Sinai in forming the California Rehabilitation Institute in place of the defunct Century City Doctors Hospital.
Opening in spring 2016, the rehabilitation facility will service those with spinal cord and brain injuries, strokes and other acute conditions in a physical rehab setting.
Combine that with the hospitality of the hotels, the retail attractions of the new shopping center, residential high-rises and the new creative occupants, and Century City is on precipice of an entirely new market.
“More bodies with smaller spaces are the future of the workplace of Century City,” Gerlach said.
