Category Archives: Market Trends & Indicators

City of Los Angeles Approves Recreational Cannabis Regulations. Boon to Industrial Property Owners

The Los Angeles City Council voted and approved new regulations for recreational cannabis businesses. Recreational marijuana will officially spread like wildfire on January 1, 2018, per California state law. This will be a boon for industrial real estate landlords as cannabis growers and cultivation operations typically pay premium industrial rental rates compared to regular warehouse and manufacturing users. Pot growers often pay in excess of 2X the market rate. Some key rules are below from the L.A. Times article. The mayor is expected to sign the ordinance soon.

Under the new regulations, pot shops can open their doors only in specific commercial and industrial zones and must operate at least 700 feet from schools, public parks and libraries, child care centers, alcohol and drug treatment centers and other “sensitive” sites, as well as from other pot retailers.

Other kinds of marijuana businesses, including growers and manufacturers, would be confined to industrial zones and banned within 600 feet of schools. And marijuana manufacturers that use volatile solvents would also be prohibited within 200 feet of residential areas.

To prevent an “undue concentration” in neighborhoods, city leaders also decided to cap the number of pot shops, growers, manufacturers and marijuana “micro-businesses,” which do a combination of things, allowed in each community.

Brick Warehouse For Sale – 135,000 SF, Los Angeles

img_2588Former American Apparel Facility.
Classic Brick Buildings, BowTruss Roof Roof, Great Natural Light.
Creative Campus conversion: art gallery, live/work.
Warehouse, Manufacturing, or Cannabis/Cultivation/Growing Uses.
Skylights, Sprinklers, Gated Parking.
1,200 AMPS of power, 120/240 Volts, 3 phase.
Adjacent to Slauson Central Retail Plaza: Starbucks, Fatburger, etc.
10 minutes south of DTLA Arts District.
For sale. img_2520



Los Angeles’ Garment Industry Frets Over Pay Hike

You can read the WSJ article here. Excerpt below.

Some say a $15 minimum wage, slated by 2020, will drive them out.

Employees sew towels and clothing at the 5 Thread Factory in the Fashion District in downtown Los Angeles. The company opened the factory just three years ago.

LOS ANGELES—Its numbers have slipped from earlier highs, but Los Angeles still boasts more jobs making jeans, jackets and other apparel than any other pocket of the country.

Manufacturers and designers now fear “Made in L.A.” is under threat from a new law set to boost the city’s minimum wage to $15 an hour by 2020.

The city’s wage law, which will raise the base pay by 50% over five years, serves as a test for urban minimum wages. Advocates say it will provide much needed help for working families but manufacturers warn it will undercut their competitiveness and drive them out of town.

Contract apparel manufacturer 5 Thread Factory, whose garments include shirts for men and women, mountain-bike gear and other products, has outgrown its two floors of space in a gritty downtown neighborhood just three years after it opened. But with wages rising, CEO Brian Zuckerman said he won’t sign another lease in the city.

“The simple answer to this whole conversation is we’re moving out of the city of L.A.,” he said.

Artists and Industrial Buildings

Although many artists have flocked to industrial areas of Los Angeles for decades, there has been a rapid increase in this movement over the past 5 years. Especially in the Downtown Arts District and the NorthEast L.A. neighborhoods of Silverlake, Glassell Park, Mt. Washington, Frogtown, and Atwater.

The below is excerpted from a WSJ Magazine feature article on Michael Kelley in 2013.

At a time when rising-star artists earned their stripes in New York, Kelley also stood apart for championing Los Angeles, a once-sleepy art scene that now simmers with younger talents like painter Mark Grotjahn and sculptor Sterling Ruby—both in their early-to-mid forties—who say they moved there in part to study with Kelley or work nearby. In fact, his thrift-store aesthetic has arguably influenced the way younger artists everywhere think about making art. “Mike brought the lowest, base forms of pop culture into the arts,” says Ruby. “That’s big with my generation, but he was the pioneer.”

It just so happens that we were involved in  real estate transactions with each of these artists (Kelley, Ruby and Grotjahn).  The neighborhoods were, Glassell Park, Frogtown, and Vernon, respectively.

Currently we have a 9,000 square foot brick building with fenced yard available for lease along the L.A. River bordering Glassell Park and Frogtown.

2500 San Fernando Rd building for lease in Glassell Park, Frogtown arts district
2500 San Fernando Rd building for lease in Glassell Park, Frogtown arts district