Moderate Rebirth of Mid-Wilshire
Compared with the prestigious office and retail district that it was up through the 1970s, Mid-Wilshire--which local business leaders prefer to call Wilshire Center--remains faded.
But compared with the dismal reputation it suffered in the mid-1990s, when it was plagued by the exodus of businesses to other office markets and a reputation for crime and grime, the strip of office and other commercial buildings between roughly Alvarado Street and Western Avenue along Wilshire Boulevard has enjoyed a resurgence.
The amount of empty office space has dropped from a high of about 35% of Mid-Wilshire’s 8 million square feet of buildings in the mid-1990s to under 16% today, according to Cushman & Wakefield statistics, which show that the district’s office market has fared little better or worse than others in the current economic downturn. Real estate data provider CoStar Group Inc. puts the vacancy rate even lower--12.8%, including space available to sublet.
Office rents remain below their peak averages of about $2 per square foot per month in the early 1990s, but they have edged up in recent years to about $1.15 per square foot.
The largest landlord in the district, Dr. David Y. Lee, said rents in his Mid-Wilshire buildings range from about $1 to $1.40 per square foot compared with 85 cents to $1.15 when his Jamison Properties Inc. began buying offices in 1995. Lee said he no longer needs to offer incentives such as free rent, free parking or parking discounts to attract tenants. The vacancy rate in his buildings is about 10%.
The area is ripe for development of retail space, according to commercial real estate broker Mike Dunn, executive vice president of Charles Dunn Co.
Many residents and business owners hope the Los Angeles Unified School District’s development of the former Ambassador Hotel site will include a movie theater and shopping complex that “could serve as a hub of retail activity for this corridor,” Dunn said.
Dunn noted that the apartment market also has improved in the last few years, as entrepreneurs have refurbished some stately old buildings and raised rents of tenants who are willing to pay because they like the charm of the 1920s- and 1930s-era buildings.
Another sign of the district’s popularity emerged this summer with the opening of a plush, $35-million spa, mall and golf complex called Aroma Wilshire Center just east of Western Avenue that caters to the city’s affluent Korean population, many of them entrepreneurs who own businesses in the district.
One of the biggest reasons for the nascent recovery in the district is the emergence of such entrepreneurs eager to invest their energies and capital in the district, Dunn said.
Most notable among these is Lee, who saw potential in Mid-Wilshire office buildings even as big institutional owners and tenants, especially insurance companies, fled the area in the 1990s and left some buildings entirely empty.
Lee’s company owns 20 buildings comprising about 7 million square feet of space in the Mid-Wilshire market, he said, plus three buildings in the Park Mile district immediately to the west of Mid-Wilshire.
Whereas the large, institutional landlords relied on big tenants who rented whole floors or more, Lee rents to a combination of large government tenants and scores of small businesses. His tenants include lawyers, accountants, mortgage brokers, stockbrokers, marketing firms, insurance brokers and other professionals and service firms, as well as four locally based community banks that maintain their headquarters in Lee buildings.
Mid-Wilshire still was suffering from its poor reputation and the effects of Metro-Rail construction that tore up the streets when Lee began buying his buildings.
But the area has recovered enough now that some think it hardly matters now whether it’s called “Mid-Wilshire” or “Wilshire Center.”
But the name is important to many business leaders, including Gary Russell, executive director of the Wilshire Center Business Improvement District and president of the area’s chamber of commerce.
“Nobody called this Mid-Wilshire until some of the commercial real estate brokers started using that name somewhere around the 1980s,” said Russell, who said the district was originally known as Wilshire Center.
The business improvement district and the chamber have been instrumental in pushing for such improvements as landscaping along the boulevard, Russell said, and in working with police and a private security force to reduce crime.
Referring to the corridor’s former glory as a haven for blue-chip corporations and fine shopping, Russell said this part of Wilshire Boulevard has no illusions about becoming “the Fifth Avenue of Los Angeles.”
Instead, he said, it’s bent on creating a new kind of urban village that is, according to the business improvement district’s slogan, “a good place to live, work and shop.”
