A real estate investor creates an ecosystem in a restored LA building, fostering relationships and business between tenants.
We recently shared WDM Publisher Bob Fox’s workplace design trend predictions for 2018. The list included several hot topics including well-being and increasingly flexible workspaces, but the trend that really stood out to the WDM team was communities becoming curated. Bob noted that as the commercial office market is being disrupted, many developers and landlords are struggling to differentiate themselves in a very crowded market while trying desperately to avoid commoditization. He believes there’s great value for tenants when their landlords are able to improve their ability to connect with others, build relationships, and through that, generate new business. Landlords are in a very unique position to curate communities in a way that builds sustainable ecosystems; where the tenants can both contribute to and benefit from being a part of the community. It’s about building carefully “Curated Communities”.
Previously, the only example of this was a medical office building, when doctors refer business to other specialists often located in the same building. But this concept is now extending into other industries. Co-working spaces naturally provide a form of curated communities as they encourage connections and generate new business. Another simple example of this idea would be a marketing agency who brings in a neighboring graphic design company for help with a client project. This ability for neighboring companies to share new ideas and creating future value is perfectly exemplified at The Collection in Los Angeles.
Located at 527 W 7th Street in the heart of downtown Los Angeles, CA, The Collection is managed by property investor, Chris Ortman. About five years ago, Chris and his father-in-law, who runs a business flipping old buildings, started renovating the 100,000 SF property. The building was run down, but he noticed that the neighborhood was changing and saw the potential in upgrading the building. Chris preserved the historic elements of the space by beautifully restoring three elevators and ground floor lobby. He even hired a professional artist to restore the ornate lobby ceiling!
After renovating office space for potential tenants, Chris began to lease them out. Meanwhile, his wife was working for a premier office furniture line and her boss saw great potential in the building. He decided to lease space in the building and built a high-end showroom for his furniture on the eighth floor. This space soon set the building standard. The furniture showroom greatly benefitted from the space as they were able to sell new tenants furniture once they moved in.
Since then, The Collection has grown exponentially, exceeding other Los Angeles high-rise buildings in rent. In fact, the rent five years ago was just $0.99/ SF per month and now has increased to $3.50/ SF, up from last year’s price of $2.82/ SF. It’s clear that tenants are willing to pay a premium to be in a building with similar companies.
The entire top floor of the building has been leased by an architecture and design firm, Wolcott, who is the fourth largest design firm in Los Angeles County that designs creative office spaces for companies all over California. Other long-term tenants include West Elm Workspace, Tangram Interiors, and Architype. The full floor co-working space has housed large tenants, such as, Freehand Hotel (rented here for six months during the construction of their hotel), The Nomad Hotel (also rented during the construction of their hotel), and start-ups, such as, Imperfect Produce, Hilton Lifestyles, and many more. Each floor has a common area where networking events between tenants are encouraged. This kind of space has evolved to a new type of culture as Chris noticed that everyone was participating in all of the building-hosted events.
Chris was very careful to consider each potential tenant he was leasing to. He maneuvered around industries such as law firms, because he believed the value in The Collection was about synergy in the building. He leaned towards creative types of business as they shared common values, shared ideas and often collaborated together, which helped boost the sense of collaboration throughout the entire building.
When there was only one floor left vacant in the building, Chris decided he would lease it himself and created a collaborative workspace with monthly, furnished private offices. The floor also couples as the ‘sky lounge’ for the building – offering amenities to the entire building such as meeting spaces, a café and lounge, and co-working. This co-working floor was designed and created to provide members with an upscale, sophisticated, and professional alternative to other shared workspaces in downtown LA.
The floor includes 12 exclusive, furnished private offices and a luxurious lounge area, including a café/bar, which serves as the coffee bar for the building. Furthering his vision for a curated community, the floor was designed to create interaction and collaboration between tenants in the building and the co-working members.
The co-working space provides many unique features, providing members with meeting spaces and private offices with signage and a dedicated suite number in the building’s main lobby directory, allowing them to be indistinguishable from The Collection’s long term lease tenants. The co-working members also benefit from plenty of natural light from large windows and have both open collaborative community space and privacy.
To further the collaboration between tenants, Chris decided to invite the entire building to enjoy the cafe on the co-working floor. Some companies were spending upwards of $200 per month on coffee, so this amenity now has not only saves tenants money, but also allowed the full-time tenants to interact more frequently with the monthly tenants. All tenants also have access to the roof deck and any tenant can reserve the space at no charge.
Today, The Collection has created its own ecosystem, fostering business transactions between tenants. Some examples Chris shared included architects and designers working together including a graphic design firm that collaborated to help a perfume company with its space and branding. It’s clear that when businesses who share common industry relationships work together, in close proximity, they can easily team up and refer business to others. This creative mixture of industries has developed into a unique synergy, resulting in successful relationships, networking, and collaboration and more revenue for tenants and members who engage in the community.