Thu. May 26th, 2022

California Market Center at 110 East 9th Street and Adidas CEO Kasper Rørsted (CMCDTLA, Getty, iStock)
California Market Center at 110 East 9th Street and Adidas CEO Kasper Rørsted (CMCDTLA, Getty, iStock)

Adidas AG has signed the largest office lease in a year in Downtown Los Angeles, giving a boost to a Brookfield remodeling project in the Fashion District.

The German shoe and sportswear giant has rented 107,000 square feet in the California Market Center, a 13-story wholesale hub at 110 E 9th St., according to the Wall Street Journal.

The Fashion District agreement marked a major Los Angeles expansion in marketing, sales and design of the world’s second largest sportswear company. It also heralded the largest office lease in the city center for more than a year.

Adidas will expand and relocate its offices in LA to the top floors of two of the interconnected, three-wing California Market Center complexes.

Brookfields John Barganski (Brookfield)
Brookfields John Barganski (Brookfield)

The company was attracted to the California Market Center because it was close to new hotels, apartments, bars, restaurants and cultural attractions, said John Barganski, a senior vice president at Brookfield.

The 57-year-old center is also within walking distance of the Crypto.com Arena, once known as the Staples Center and home to the Los Angeles Kings, Lakers, Clippers and Sparks sports teams.

“In our marketing materials, we identified the number of steps it was from our place to Staples,” Barganski said.

Brookfield, based in Toronto, Canada, acquired a controlling stake in the 2.5 million-square-foot fashion complex in 2017 in a $ 440 million deal. It then sank $ 250 million to move the fashion companies into one of three buildings and design the rest of the space for other office tenants.

In any case, the adidas agreement suggests that Downtown Los Angeles may start pulling large office tenants despite the coronavirus pandemic.
Downtown, like most U.S. markets, has been hit hard by the contagion with vacant offices among the highest in the country. Vacancies were 19.6 percent in the third quarter of 2021, compared to 15.7 percent a year earlier, according to the Downtown Center Business Improvement District.

By the middle of the year, LA office leasing had risen slightly to 3 million square feet with a handful of high-profile deals, including three at Boston Properties-owned offices.

At the same time, LA as a whole had a vacancy rate of 19.2 percent, among the highest in the country, compared to 13 percent at the end of 2019.

[WSJ] – Dana Bartholomew

Leave a Reply

Your email address will not be published.