Los Angeles Touring

Netflix’s expansion in Hollywood continues. Kilroy Realty Corporation announced today that the streaming company is renting all the available office space—355,000 square feet across three buildings—in Kilroy’s under-construction Academy on Vine project.

That means, by our tally, Netflix will rent an impressive 1.1 million square feet of office space in Hollywood within the next two years.

“Our expansion into the Academy on Vine property further deepens our connection with the Los Angeles and Hollywood communities,” Netflix CFO David Wells said in a statement.

The Academy on Vine complex is expected to be complete in 2020. The development occupies an entire city block bounded by Vine Street, DeLongpre Avenue, Ivar Street, and Homewood Avenue. The project also includes a 20-story residential tower with 193 units and retail space.

Just over a month ago, Hudson Pacific Properties announced that Netflix would be lease the whole 328,000-square-foot, 13-story EPIC building on Sunset Boulevard, when it’s complete in 2020.

Netflix also leases the 14-story companion to EPIC—ICON—and about 92,000 square feet of an adjacent building called CUE—both on the Sunset Bronson lot and owned by Hudson Pacific Properties.

High Street Residential, a subsidiary of Trammell Crow Company has broken ground on a multifamily residential complex near Los Angeles State Historic Park, according to a representative of the developer.

The project, which began construction last week, is located on a triangular site at 1101 N. Main Street.  Plans call for the construction of a seven-story one block east of the Gold Line's Chinatown Station, building featuring 318 studio, one-, and two-bedroom apartments atop a 526-car parking garage.

Designed by KFA Architecture, the podium-type building would have an E-shaped footprint with residential amenities set between three rows of apartment blocks.  Floor plans show three courtyards - one of which would feature a swimming pool - in addition to a community room and a gym.

Construction is anticipated to occur over two years.

The project site - bounded by Main, Llewellyn, and Roundout Streets - abuts the vacant lot where Atlas Capital Group obtained from the City of Los Angeles in March 2019 to construct a 725-unit apartment’s complex known as College Station.  But in a controversial move, the Los Angeles City Council signed off on Atlas Capital's proposed development without a 37-unit affordable set-aside that had been recommended by the City Planning Commission.  Chinatown Community for Equitable Development, a group that has vocally opposed the project, has since sued to overturn its approvals and block construction.

High Street Residential's project, which builds off of 15-year-old entitlements, has not faced the same type of opposition.

Both development sites are located within the Cornfield-Arroyo Specific Plan (CASP), which dictates land use in the area surrounding Los Angeles State Historic Park and the Los Angeles River, the projects.  Though the CASP has been lauded for its forward-thinking elements - including a lack of parking requirements for new developments - it has yet to produce a single unit of new housing since its adoption in 2013, prompting City Councilmember Gil Cedillo to push for policy changes.  The two housing projects within the CASP area that have moved forward - 1101 N. Main Street and College Station - were entitled under the prior zoning laws.

The 1101 N. Main Street development is the second for Trammell Crow Company in the Chinatown neighborhood, following the 355-unit La Plaza Cultura Village project now wrapping up construction just north of Olvera Street.

Every week, FashionUnited selects the most interesting reads about the fashion industry published across US and international news outlets. Here’s what you may have missed:

Is there such a thing as “ethical consumerism”?

We hear it time and again: young consumers are increasingly taking social and environmental issues into account when shopping. In a recent survey conducted in Europe, 1 in 3 consumers said brands should be more transparent about what they are doing to fight climate change and global poverty. In another study by the Changing Markets Foundation, published last month, 51 percent of Americans said they would be put off from buying products from brands which do not provide workers a fair living wage. Even more surveyors (57 percent) said they’d be willing to pay more for clothes only to guarantee everyone across the supply earns a decent living.

However, were 51 percent of Americans actually boycotting brands on that basis, the fashion industry would certainly be moving a lot faster to change its ways. Clearly, they are not. Not only because talk is cheap (who would want to look bad by telling a researcher they don’t care about poverty and the environment?) but mainly because shopping ethically is easier said than done, as beautifully pointed out by Maya Singer on Vogue Magazine this week.

Those interested in “protesting with their wallets” encounter a plethora of obstacles and tricky decisions. “Do I buy one brand’s shoe made entirely from sea garbage, but in a sweatshop in Southeast Asia? Or do I buy from a brand with no environmental commitments, that produces in a unionized factory here in the USA? What if the brand that produces domestically is led by a CEO with #MeToo complaints? Another hypothetical: let’s say I’ve discovered the ethically perfect running shoe. It costs $800, there’s a six-month waiting list to get a pair, they come in one color, which is crap brown, and oh, by the way, I have to buy without trying them on”, writes Singer. At the end of the day, no matter how ethical shoppers would like to be, they are looking for products which serve a given purpose for a price they can afford. Ethics will always come after practicality in price. But Singer believes there is still hope. Click on the link above to read her article in full and find out why.

The environmental cost of free returns

When a piece of clothing bought online doesn’t fit or the color looks different than the one on screen, many consumers think it’s only fair for the shop to cover the return costs. After all, they can’t see the product in person before committing to the purchase. That is why free shipping and free returns are two excellent strategies to increase sales and consumer loyalty. However, a recent survey revealed 40 percent of all online purchases are returned, as many consumers buy several sizes of the same product just to see which one fits. Some even buy clothes with the specific aim to take a picture for Instagram and then return them!

This week, Fast Company highlighted that free returns have a high environmental impact, as they generate more transportation of goods back and forth, which means increased greenhouse emissions. Read the article in full here.

Would more women in fashion power positions mean more female customers?

A recent study pointed out that women are far less likely to be promoted in the fashion industry. Only 40 percent of womenswear fashion brands are designed by women and only 14 percent of the 50 major fashion brands are run by women. Forbes contributor Pamela Danziger asks: what would happen if womenswear companies would bring more women into leadership and decision-making positions? Several studies point out such a change would bring extremely positive results. Read it here.

Data analytics are reshaping the fashion industry

Vogue’s new business-focused platform, Vogue Business, has published an interesting piece about the use of data in fashion retail. How can it help brands to increase sales? What are its pros, cons and limitations? As a bonus, the publication lists 6 useful trend-tracking tools.

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Picture: Pixabay

Construction is underway for a mixed-use development featuring townhomes and live/work lofts in Gardena.

The project, called Gardena Place, is rising from a roughly two-acre site at 14321 Van Ness Avenue.  Plans call for a total of 40 residential units - including 35 townhomes and five live/work units - ranging between 1,009 and 1,979 square feet in size.

Renderings portray a contemporary design for the project, which will employ solar power in each of its homes.

Completion is anticipated later this year.  Sales prices are expected to start in the mid-$500,000s.

The project is being developed by an entity called G3 Urban.

Dallas Mavericks veteran Dirk Nowitzki is about ready to finally kick off his 21st season in the NBA.

Nowitzki underwent surgery to remove bone spurs from his left ankle just before the end of last season, and has been sidelined ever since. The 13-time All-Star had targeted his return for the start of the season, but suffered tendon soreness just before training camp, and has yet to take the court.

Nowitzki, speaking with Dallas mayor Mike Rawlings while receiving the key to the city ahead of the Mavericks’ game against the Brooklyn Nets on Wednesday night, said he hopes to be on the court again by the end of the year.

“It’s just hard when I haven’t done much for eight weeks and there’s a 40-year-old basically starting from scratch to try to get back in shape to play NBA minutes,” Nowitzki told the Associated Press. “Hopefully soon. Hopefully, somewhere in December I’ll be ready and the body will respond the right way.”

When he finally takes the court this fall, Nowitzki will become the first player in NBA history to play 21 seasons with the same franchise — passing Kobe Bryant, who hit 20 seasons with the Los Angeles Lakers before he retired in 2016.

The 40-year-old said he has been slowly increasing the intensity of his workouts over the past few weeks, but has yet to participate in a full practice. He doesn’t want to rush anything.

“The reason why we’re taking it so slow now is once I get out there, I want to finish the rest of the season healthy,” Nowitzki told the Associated Press. “I don’t want to come back too soon now and then have setbacks again like I did with the Achilles a few years ago. Next thing you know I missed another few weeks.”

While he didn’t say how he felt about returning for a 22nd season next year, Nowitzki did say he was beyond ready to get back on the court again.

“I’ve been antsy,” Nowitzki told the Associated Press. “Had the surgery in April and it’s been nothing but rehab and treadmills. Love to step out there soon and get the kick of competing, the crowd involved. It’s just something I miss. And once my career is over, that’s for sure something I’ll miss, the kick, the rush, the adrenaline.”

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Retail is changing in our digital world. As consumer behaviors over the last 12 months has proven, shoppers aren’t interested in entirely ditching brick and mortar retail in favor of digital, and that means both channels of commerce need to adapt to fit what shoppers want. Analysts at technology and consultancy firm Visual Retailing have determined the more important strategies retailers can take in 2019 to meet consumer trends.

Speedy delivery

Competitive retailers aiming to attract shoppers in this year’s busy holiday shopping season have discovered quickly that offering fast delivery options is a must. Amazon offers its Prime members free two-day delivery, a deal it extended to all shoppers across the United States for the holidays. Target and Walmart did the same, offering free shipping within two days.

Today’s shopper wants an immediate gratification from a purchase. Anything longer than two days is too long, and the shopper will find a product elsewhere.

Constant connection to the consumer

“When [shoppers] identify a buying need, they want to source, compare and purchase there and then, wherever they may be,” read Visual Retailing’s report. Shoppers know what they want, and it’s the retailer’s job to deliver. With new technology and AI features, a shopping experience can be made as convenient as possible for shoppers.

Farfetch recently introduced a visual search tool that allows its shoppers to search an image of any product they want and find the same or similar style through the retailer’s site. Similarly, Asos offers an AI size assistance tool to help consumers find the right size while shopping online.

The customer “experience”

”Experience” has been one of the biggest keywords in retail lately. Technology allows shoppers to find what they want anywhere, so enticing them into a store or directing them to an ecommerce site relies on the experience shoppers know they can expect from a retailer.

A recent study from the Sitel Group determined that interactions with salespeople in a physical store influence whether or not they choose to return, more than pricing or quality of product. The report stated that “consumers’ loyalty to brands is delicate at best.”

Along with positive human interactions, today’s consumer wants to be entertained when shopping in brick and mortar, and have a convenient experience when shopping online. In the digital sector, Sies Marjan partnered with a software called Flow to bring ease in digital sales made internationally. The brand’s shoppers around the globe can seamlessly shop through the site in their own currency and with reasonable shipping times.

Nike recently planted its House of Innovation store in a 68,000 square foot space on New York’s Fifth Avenue. Its shockingly large size is almost unheard of in a retail landscape when most physical stores are being downsized, however Nike is using all of its square footage for the customer experience.The store brings in foot traffic through omnichannel in-store options that work with an app and a museum dedicated to the brand’s products.

Exclusivity and personalization

Shoppers in 2019 understand the value of their dollar and their data, and they want something in return. “A relationship is all about give and take, and a retailer’s relationship with the customer should be no different,” wrote Visual Retailing. The firm suggests exclusive offers or customizing option.

Brands have been offering customization options as a way to spark the consumer’s engagement. Shoppers are no longer accepting “cookie cutter” items and want their purchases to be reflective of their individuality.

Sustainable initiatives

Consumers trust brands more than they trust the government, according to a report by Edelman Earned Brand. Shoppers, especially those in the millennial and Gen Z generations, will select where to shop due to the company’s social or political stances. And sustainability is becoming a main focus for shoppers and brands alike.

Multiple new sustainable missions amongst retailers and brands have popped up just this month. A joint effort between Stella McCartney and the UN has resulted in a charter for climate action, with over 40 brands signing on in less than a week. Global luxury group Kering teamed up with ecological organization the Savory Institute to improve the environmental impact of the fashion supply chain.

“An environmental conscience is essential in 2019,” Visual Retailing wrote. “Having paper as the only option for blanket-distributed catalogues will be frowned upon, whilst single use packaging should be an option rather than forced upon the customer.”

Photo: Pixabay

After nearly two years of construction, the steel and concrete frame of West Hollywood's Pendry Hotel & Residences is clearly visible at the corner of Sunset Boulevard and Olive Drive.

The project, a joint venture between AECOM Capital and Combined Properties, consists of two mid-rise structures that will feature 149 hotel rooms, 40 condominiums, street-fronting commercial space, and amenities such as a rooftop pool, a live entertainment venue, a screening room, a bowling alley, and a fitness center.

EYRC Architects, Cuningham Group, and Martin Drudnizki Design Studio comprise the project's design team, while AECOM Hunt is its construction manager.  Renderings depict a pair of contemporary mid-rise structures, with stepped building heights that create terrace levels down the hillside property.

Construction of the approximately 300,000-square-foot development is expected to be complete in 2020.

The Sunset Strip has recently seen several similar developments combining a hotel with condominiums, including the EDITION Hotel & Residences that are now nearing completion.

Renderings of 825 South Hill and Times Mirror Square, Level, and Hope + Flower

More than 8,000 apartment units are expected to come online in Downtown Los Angeles this year — more than anywhere else in L.A. County.

One foreign developer stands to benefit more than most of its competitors from the region’s biggest construction boom. Onni Group, a Canadian firm, is on track to deliver some 1,250 of those Downtown apartments this year.

The pipeline doesn’t end there. The company has proposed building another 1,800 units in the next few years, bringing its total proposed units in the submarket to nearly 4,000.

“They have really come into the Downtown L.A. market and exploded,” said Bryan Witkow, founder and CEO of the Tenant Group. “They’re putting up the most units in Downtown right now.”

With a small leadership team of four brothers, Onni has been able to expand from its base in Vancouver to become a heavy-hitting national player with commercial, industrial, multifamily and single-family assets across the country. In L.A., it’s taken an especially aggressive stance, picking up a $630 million property in Miracle Mile, building ground-up projects in the Arts District, and planning multifamily complexes in Santa Monica.

But in L.A.’s Downtown, where the firm has been particularly active, Onni’s dominant position also carries significant risks for the company. This year could be a challenging one for the Downtown market, one in which developers may struggle with an overhang of available luxury apartments. The vacancy rate in Downtown’s multifamily market inched up to double digits in December, and marketers are already ramping up the incentives for renters to mitigate the downward pressure from the vigorous building cycle.

The media-shy company has also faced a backlash from labor unions and affordable housing advocates who are fearful that its rapid expansion in the market is coming at a cost. Most recently, the firm has come under scrutiny over its plans to redevelop Times Mirror Square, the former home of the Los Angeles Times.

That project, set to bring more than 1,000 units, is Onni’s biggest and most ambitious in the city yet.

Units in the pipeline

In addition to Times Mirror Square, Onni is working on four other major projects in the immediate Downtown area. At 1212 Flower Street, the firm is close to topping out on two high-rise structures that will include 730 residential units and 8,000 square feet of retail space. Less than a mile away, Onni’s largest tower yet — 825 South Hill — is close to opening. It’ll include 516 apartments and more than 5,000 square feet of retail space across 53 stories.

On that same block, at 1000 South Hill Street, Onni has proposed building a 60-story tower with 700 apartments and 15,000 square feet of retail. It’s also moving forward with a plan to build 347 live/work units, 187,000 square feet of office space and 22,000 square feet of retail on Violet Avenue in the Arts District.

Onni is “seizing opportunities here at a rapid pace and at a large scale,” said Nick Griffin, executive director of Downtown Center Business Improvement District. Onni, which is an investor in the DCBID, is one of the largest property owners in the organization, Griffin added.

Onni denied repeated requests for interviews. In an emailed statement, Duncan Wlodarczak, a spokesperson for the firm, said L.A. has been an attractive market for the firm because of its “strong economic fundamentals” and “positive job growth.”

With all those projects, Onni is more exposed than most developers to the effects of an oversupplied market, industry analysts said. The company also largely offers units that range in the higher end, eliminating a percentage of L.A.’s population seeking housing.

As an example, rates at Onni’s 825 South Hill start from $2,500 per month for a one-bedroom and can range up to $12,650 monthly for a three-bedroom, according to apartment listings online. The firm is also offering L.A.’s most expensive penthouse at Ninth + Olive, an 18,000-square-foot spread seeking $100,000 per month.

Stephen Somer, a managing director at Eastdil Secured, said that a potential downturn could impact Onni, given the sheer amount of units they are bringing in the Downtown submarket.

While Downtown is definitely saturated, it’s still a popular location for jobs, businesses and young people, said Barbara Byrne Denham, a senior economist at real estate research firm Reis.

Units are “just coming online so rapidly that it’s hard to fill them upon completion,” Denham said. She said she expects the vacancy rate to continue to inch up from December’s 10.3 percent as more projects wrap.

In the past four years, there have been about 2,000 to 3,000 units delivered each year, said Stephen Basham, an analyst at CoStar. Most of those new buildings are mostly stabilized or fully leased, he added.

“There’s obviously strong demand for what is being built in Downtown right now,” Basham said.

Rent growth has also been picking up, meaning demand has caught up with the supply boom of the last few years, Basham added. “The area got a chance to catch its breath,” he said.

All in the Family

Onni’s roots date to the mid-1960s, when the first wave of the De Cotiis family immigrated to Vancouver from Italy. Inno De Cotiis started Onni — named after his first name spelled backwards — some thirty years later.

The De Cotiis real estate empire grew beyond Onni. While Inno De Cotiis founded Onni, his siblings and other relatives went on to open other real estate firms, such as Amacon, which owns the award-winning Loden Hotel in Vancouver, and Pinnacle International, which builds high-rise condo towers.

With their expansive family, the De Cotiis clan helped transform Vancouver from a sleepy Canadian town into a bustling metropolis filled with skyscrapers. Onni, specifically, earned a name for itself by building condominiums and master-planned communities.

At Onni, Inno’s four sons — Rossano, Morris, Giulio and Paolo — now run the shop. Giulio and Morris oversee the construction and property management divisions, while Paolo, the youngest, oversees international expansion, according to a promotional feature published by BCB Business. Rossano, meanwhile, is president.

After two decades building the company in Canada, the firm began to eye assets in the United States in 2008, as the recession was hitting, Kevin Carpenter, an executive at the firm, told Crain’s Chicago. By 2012, the firm was picking up multifamily and commercial properties in Chicago and Phoenix.

That same year Onni broke ground on two projects in L.A.: a 12-story office building on 9th Street in Downtown and a five-story office building at 1212 Flower Street. (Onni is currently building a pair of high-rise residential towers at the latter, while maintaining its original office building intact.)

Onni now has offices in L.A., Chicago, Seattle, Phoenix, Toronto and Mexico. Combined, the firm has built 12,000 homes, 9.5 million square feet of commercial space and more than 6,200 apartments in the last decade, according to its website.

Somer, who has worked with Onni several times in the past, said it is Onni’s DNA that allows the firm to be so “entrepreneurial.” In contrast to its publicly traded competitors like Brookfield or Blackstone, beholden to the whims of shareholders, the decision-making at Onni lies in the hands of four key individuals.

“They don’t have the same constraints as other institutional buyers may have with third-party capital or committees, so they can be very nimble when they need to be,” he said. “When they know they want to buy something, they buy it.”

Onni finances most of their projects with their own capital and bank financing, Crain’s reported. The firm generally doesn’t sell many of its assets, utilizing debt markets when appropriate to refinance properties, Somer added.

As a full-service real estate firm, the company also handles most aspects of its projects in-house, managing construction, marketing, and development themselves.

The De Cotiis brothers are former provincial high school wrestling champions, who have ended up hiring other high-level athletes.

“We have several national-level rugby players,” Beau Jarvis, vice president of development at Onni, told BCB Business. “This isn’t coincidence. If you’re serious about sports, then you’re extremely goal-oriented, self-motivated and willing to work hard, and this extrapolates directly to our business.”

Downtown development

As the firm has grown, so have the number of watchful eyes keeping tabs on the company.

In November 2017, a coalition of groups accused the developer of foul play at its Level Furnished Living building at 888 Olive Street. They claimed the developer was operating an “unpermitted hotel” by converting some of its condos to extended-stay units. Onni ultimately won that battle a year later.

In an emailed statement, Charlie Carnow, a research analyst at Unite Here Local 11, said Onni has “not been responsive” to the group’s concerns.

“We hope future housing projects Onni builds actually remain housing,” Carnow said. “We also hope they start including affordable units in their Downtown LA projects.”

Wlodarczak, the Onni spokesperson, didn’t directly respond to Carnow’s claims. He said the firm works “closely with local residents, community groups, and local elected and government officials when developing, building, and operating all of our properties.”

The claims made by Unite and other groups weren’t the first of their kind that Onni has faced. In May 2017, the City of Vancouver ordered Onni to pay $24,000 in fines for running illegal short-term rentals at its flagship Level building in Vancouver.

The company has also been feeling pressure from preservationists, who have gathered in large numbers to protest its Times Square Mirror redevelopment plans.

Late last year, a group led by local resident Richard Schave railed against Onni’s plans to tear down a 1970s-era office building and parking garage designed by architect William Pereira. The City Council ultimately sided with Onni, ruling that the firm could demolish the Pereira structures.

An investigation by the Los Angeles Times, published Thursday, showed Onni donated $50,000 to a campaign committee tied to City Council member Jose Huizar just two months before the city ruled in their favor. Huizar is at the center of an FBI investigation into potential corruption involving City Hall officials and major developers working in the city. It’s unclear if the donation had any impact on the vote.

With the City Council’s blessing, Onni will build two modern, glassy apartment towers rising 37 and 53 stories at the Times Mirror site. They will contain more than 1,100 apartments, a swimming pool, restaurants and offices.

Despite the scrutiny and the market risks Onni is undertaking, industry players say Onni’s broad diversification, coupled with a strong demand for more housing, will likely insulate it from any looming downturn. “They can weather the storm,” Somer said.

And if there is one thing the community does agree on, it’s that Onni is radically changing the Downtown skyline.

“They clearly have a lot of confidence in the market,” Griffin said. “They look at Downtown and see where this is going. We’re not even at halftime for this game.”