A new wave of urban, experiential and independent retail concepts catering to changing consumer demands has led to the rise of 100 “Cool Streets” across the U.S. and Canada. Cushman & Wakefield’s Cool Streets of North America report explores what’s driving the rise of the hottest retail districts across the U.S. and Canada and outlines the top 20 Cool Streets in depth, including one in Los Angeles.
There may be no better examples of where Cool Street neighborhoods have transformed from edgy to cool, to mainstream appeal than LA’s Arts District.
The Arts District is located immediately east of downtown and Little Tokyo. The area was an industrial neighborhood—full of factories and warehouses (first for rail freight and later for trucking). When manufacturing consolidation began to increase in the 1950s, many of these buildings went vacant over the successive years. Artists struggling to pay rent started moving into the district by the late 1960s (although local zoning was exclusively industrial until 1979). Galleries began to proliferate in spurts through the 1980s and 1990s. Industrial conversions to loft and multifamily projects took hold during the early 2000s, and the market increasingly saw the addition of new restaurants and bars. But the real explosion has occurred over the last few years. The downside, of course, is that while this may still be one of the best neighborhoods in Los Angeles to sell art, many of the struggling artists that initially called this enclave home have been priced out.
“Arts District was an industrial sector since the turn of the century which became somewhat of a desolate area in modern times. But in recent years, it has been the hot-bed for adaptive reuse and development projects, providing a new landscape for retail, office, and residential spaces. With the increased population, work force and visitors, Arts District has been garnering renowned establishments from all parts of the world to become a part of its unique culture. Moreover, different industries (such as music, production, filming, etc.) which seemed to have been imbedded in other parts of Los Angeles are now making the Arts District their new home. Even though this transition has been going on for several years, there are more projects planned to be realized, which will keep the momentum going,” said Jae Yoo, Executive Director, who specializes in industrial properties in the Downtown LA area.
With 29.8% millennial population and a $30,615 median household income, the Arts District is a vital arts community. It is the home of LA’s Institute of Contemporary Art Museum, the A&D (Architecture and Design) Museum and a number of prominent galleries, among them Hauser & Wirth and Sci-ARC. It has also become a dining mecca (Bavel, Cerveteca, The Pie Hole, and Wurstkuche, to mention a few). It boasts a thriving nightlife scene (Everson Royce Bar, Greenbar Distillery, Resident, Arts Brewing Co., and others), and has also become an up-and-coming funky retail hotspot (Lot, Stock & Barrel, Two Bit Circus, etc.).
Much of this activity is due to the appeal of a live/work/play approach which accelerated with the delivery of new projects (most of them mixed-use) including One Santa Fe (2014), the Garey Building (2016), the 230,000 square foot creative office, retail and restaurant project At Mateo, and recently opened The Aliso (2019) among others.
Warner Music Group has space in the renovated former Ford Factory. Continuum is repositioning a former cold storage space at 640 S. Santa Fe to 107,000 square feet of creative office and retail. The Arts District is currently expanding its offerings to hospitality, with upscale Soho House planned to start renovating a century-old 80,000-square-foot warehouse shortly. This follows SunCal’s repositioning of a former fire station to the boutique Firehouse Hotel and predates the delivery of its planned $2 billion high-rise 6 AM project; this proposed project would add two hotels, nearly 2,000 housing units, office space, parks and retail across four towers that will rank as among the tallest in Los Angeles.
Not only do we see the Cool Streets momentum continuing in the LA Arts District; we see it accelerating into warp speed.
Cool Streets are about more than just retail; their rise is at the nexus of multiple trends that impact not only commercial real estate but also society as a whole: the new urbanism, the impact of opportunity zones, the growing gulf between skilled and unskilled labor, the benefits and risks of a global tech-driven economy, and the rise of an experience-based economy.