We acquired the asset in August of 2018 with plans to renovate the space and convert it into a creative office use. To create a modern office environment while still maintaining the building’s original rustic industrial aesthetic, we updated the electrical and mechanical systems, constructed new bathrooms, installed new structural supports and a new roof, poured a new concrete slab and restored the exterior and interior masonry walls and original wood ceiling, plus expanded the facade openings with new custom steel windows.
As reported previously, shortly after acquiring the building, we were able to successfully execute a lease with Mass Appeal, a high-profile New York-based entertainment and media firm looking to expand their West Coast presence. Because of our ability to provide a unique and custom build-out design, we were able to attract a high-quality tenant to the street that we believe will help continue the growth of one of the city’s historically great neighborhoods (not only fulfilling the spirit of the Opportunity Zone program but in turn further driving the long-term performance of our Opportunity Fund’s investment).
Despite the potential challenges associated with opening a new office during the ongoing pandemic, Mass Appeal is planning to move into the space within the next few weeks and the building has officially been placed into service. The basis of the building has doubled through redevelopment efforts and the substantial improvement threshold has been met in accordance with the Opportunity Fund’s requirements to meet the stipulations of the Opportunity Zone program.
How has COVID-19 impacted our investment?
While no industry or asset class has been immune to the effects of the coronavirus pandemic, we continue to be optimistic about the long-term potential of the Los Angeles market and specifically the West Jefferson/West Adams corridor as a hub for both technology and media companies.
As tech giants like Amazon have continued to drive the growth (and prices) of nearby Culver City, many companies including Apple have moved farther east in search of both more space and more affordability – recently companies like Sweetgreen have even opted to leave Culver City entirely and move to the West Jefferson corridor. This has continued to inject new energy into the West Adams/West Jefferson community that we believe will help further stimulate the area.
To date, many of these digital media and technology companies have been better able to weather the challenges caused by the coronavirus pandemic and the resulting shutdowns. We believe that the combination of these companies’ more resilient businesses and the proximity/relative affordability of the West Jefferson neighborhood should provide greater stability for our investments, as well as the opportunity for the Fundrise Opportunity Fund to outperform many other single-asset or less diversified funds.
If you’re interested in placing an investment in the Fundrise Opportunity Fund, you may do so here. For any questions, please feel free to contact us at firstname.lastname@example.org or schedule a time to talk.