Making It in Shade of Freeways

During morning rush hour, streams of cars and trucks send steady vibrations down through the deck and steel supports of the Hollywood Freeway. Below the traffic lanes, where only a hint of sunlight penetrates the swirling dust, the Hollywood Bowl Self Storage occupies a coveted piece of commercial real estate.

“Most people don’t realize there’s a freeway above us,” said Roberta Colburn, a manager at the company, which has operated in the freeway shadows on Argyle Street for 18 years. “They think it’s a roof.”

The company’s ranks of sheds sit on an “air space” parcel that it leases from the California Department of Transportation. Statewide, there are hundreds of such properties hugging Caltrans freeways, transition roads and ramps. Real estate developers prize the sometimes-sooty lots for their low rents and central locations, not to mention convenient freeway access.

“It’s like any other piece of real estate--it depends on population density, traffic and visibility,” said Gary Zentmyer, a La Canada Flintridge developer who built a movie theater, coffee shop, bagel store and restaurants beneath the Glendale Freeway. “You know what we say in real estate: It’s location, location, location.”

In Los Angeles, cold-storage companies use the properties to keep everything from lettuce to beef on ice. Clothing manufacturers favor the parcels for dress and jean factories. And state, county and city agencies convert them into overflow parking for auto fleets.

Even the J. Paul Getty Trust is a Caltrans renter, storing equipment--not art--under a highway.

“It’s noisy, there’s vibrations and it’s always dusty,” says Jeff Thompson, an associate vice president with Colliers Seely, a Los Angeles real estate firm that has subleased about two dozen air space properties over 15 years. “But you do get abundant parking, better loading and a cheap price.”

The roughly 7,225 parcels earn about $20 million in annual lease revenues for Caltrans, which uses the money for mass transit projects, officials said. Rents can be as much as $30 a square foot, depending on the location, and generally are 20% to 30% lower than the market rate.

“We consider it successful and innovative and a good example of optimizing state assets,” Caltrans spokesman Gene Berthelsen said of the air space program.

Zentmyer was sold on it in 1995, when he signed a 55-year lease for the seven acres at the junction of the Glendale and Foothill freeways. The property soon became home to a Starbucks, Goldstein’s Bagels, Chinese and Italian restaurants and a United Artists Theaters multiplex.

As a quarter-million vehicles zip overhead each day, the bagel customers and moviegoers seem oblivious to the commotion. The multiplex is sheathed in extra soundproofing, and the theaters bring in more money than any other United Artists house in Southern California, Zentmyer said.

“It’s hard to come up with space in an area that has been built out for 25 to 30 years,” he added. “But it doesn’t get much better than this. It’s maximum exposure to eyeballs.”

Yet there are drawbacks. Many of the properties are not in the prettiest or safest neighborhoods. And tenants must contend with exposure to auto emissions and possible earthquake dangers.

But that doesn’t bother storage company owners Roberta and David Colburn, who cited other advantages to doing business in the nether world of overpasses.

“It’s drier in the winter and cooler in the summer,” David Colburn said.