The area north of LAX and southeast of Marina del Rey that real estate brokers have dubbed ‘the lower Westside’ is drawing an influx of new housing, young-skewing firms and entertainment outlets.
Big-name media and technology companies are accelerating their push in the Playa Vista neighborhood. And a large mall in nearby Westchester is converting to an all-entertainment format in hopes of appealing to the newcomers’ youth and wealth.
The Promenade at Howard Hughes Center, a prominent mall next to the 405 Freeway, will replace stores with restaurants, arcades and other venues that favor recreation over commerce, its owners said. The mall already has a luxury theater complex.
The economic downturn took a toll on the center, however, forcing the closure of a Borders bookstore and Calendar Grill. Another major tenant, Nordstrom Rack, is moving to rival mall Westfield Culver City.
The departures “gave us the opportunity to reposition the property,” said Howard Wong, director of leasing for owner Passco Cos. “We want to take advantage of what’s happening in the market.”
What’s happening is an influx of young-skewing firms such as YouTube, Microsoft and Fox SportsInteractive Media to Playa Vista. Video game firms GameFly and Riot Games are in offices by the mall.
The lower Westside is attracting such tenants with cheaper, more abundant office space than can be found in trendy tech-centric Santa Monica, brokers say.
With shopping on the way out at the Promenade, Passco will bring in entertainment-oriented restaurants Dave & Buster’s and Buffalo Wild Wings. Dave & Buster’s locations typically offer billiards, shuffleboard and arcade games while Buffalo Wild Wings sells food in a sports bar setting. Both restaurants are slated to open late this year.
Passco may also bring in an upscale bowling alley operator and nighttime entertainment such as a comedy club or piano bar. Adding more entertainment could also increase the mall’s appeal to out-of-town visitors, Wong said.
“There is a void in the Westside market,” he said, for entertainment complexes that cater to both tourists and locals such as L.A. Live in downtown Los Angeles, Universal CityWalk in Universal City and Hollywood & Highland in Hollywood.
Passco, an Irvine commercial property landlord, hopes to sell the Art Deco-style mall completed in 2001 for an undetermined price. It has an assessed value of more than $88 million. The mall is part of Howard Hughes Center, which includes five office buildings. The addition of as many as 1,000 apartments is planned.
Growth near Marina del Rey in and around the former headquarters of aviation mogul Howard Hughes is ongoing. New homes, offices, stores and parks are being erected by multiple developers.
A $260-million project called the Runway at Playa Vista is intended to be the commercial and social heart of the Playa Vista planned community, which already has more than 3,000 residences.
Preliminary work on the Runway is complete, developer David Binswanger of Lincoln Property Co. said. “The next six months is when we really start coming out of the ground.”
The Runway is being built south of Jefferson Boulevard and will house a Whole Foods grocery store, 10-screen Cinemark movie theater, “chef-driven” restaurants and shops. Apartments and office spaces will rise above ground-floor retail shops and top out at four stories.
The complex — about the size of four city blocks — should open in about a year. It is intended to look as if it evolved more slowly over time. Building materials similar to those used on well-known Los Angeles shopping streets such as Abbot Kinney Boulevard and Melrose Avenue will be incorporated, and full-grown native California trees will be brought in to add a sense of permanence.
Brookfield Homes, which took over as master developer of Playa Vista in a $250-million transaction in 2012, is expected to kick off more residential development there next year. KB Home, Irvine Apartment Communities and Brookfield are planning to build condominiums and apartments on blocks around the Runway.
In another part of Playa Vista, Los Angeles developer Ratkovich Co. is converting Howard Hughes’ old industrial and office properties into outposts for creative firms. Tenants at what Ratkovich calls the Hercules Campus at Playa Vista include YouTube, which operates a studio there.
Video game maker Konami Digital Entertainment, known for its Metal Gear Sold franchise, opened a studio at Hercules Campus last month.
North of the Jefferson Boulevard boundary of Playa Vista is a scattering of old industrial buildings that have been converted to office space for creative firms such as advertising agencies Deutsch, TBWA\Chiat\Day and Zimmerman Advertising.
The newest big addition on the north side of Jefferson is the Reserve, a former U.S. Postal Servicedistribution center turned office building. Entertainment media company TMZ is headquartered there.
Sony Computer Entertainment has a PlayStation video game outpost there and Microsoft just opened an office there that includes what it calls a technology “showcase office” to display its latest devices and software to customers and to host community events.
The 20-acre Reserve campus, which opened this year, is half occupied, landlord Jeff Worthe said.
“Santa Monica is becoming more expensive,” he said. “Playa Vista is an alternative to be on the Westside at a lower price point.”