We are pleased to report that we have begun construction on one of our Opportunity Zone assets in LA after securing a five-year lease with a major entertainment and media firm.
In August of 2018, we acquired a unique asset located in a designated Opportunity Zone census tract in Los Angeles with plans to rehabilitate the space for creative office use.
One year later, we have successfully executed a five-year lease with Mass Appeal, a high-profile New York-based entertainment and media firm, and have commenced construction on their new space. Our team is currently working to design a custom build-out that will serve to meet the needs of the fast-growing business.
We’re pleased to report that our team is on track to complete the renovations within the 30-month time frame mandated by Opportunity Zone legislation. As you can see from the recent photos, the structural work is underway and the design is beginning to take shape. We plan to restore the interior brick walls and update the layout to create a rustic industrial aesthetic. The modernized open floor plan and high ceilings combined with the unique architecture provide a creative workspace.
The Culver City-West Adams Corridor is continuing to become a major technology and startup hub as office demand grows and rental rates increase throughout the city. Companies are seeking amenitized locations without the prices typical in the submarkets of West LA, Playa Vista, and Santa Monica. This asset provides both relatively affordable rental rates and an attractive location for growing businesses.
Centrally located between downtown LA and the westside, the property is just a few blocks from the city’s new light rail line, and also offers convenient access both to the 10 freeway and LAX airport. As the Culver City-West Adams corridor continues to transform from an underutilized industrial strip into a vibrant office and retail community, we expect additional companies to move to the neighborhood, which may support increases in rental rates, asset valuations, and job growth within the census tract.
Upon completion of the tenant’s build-out, we expect to begin earning a stable cash flow. We anticipate construction to be completed by end of 2019/early 2020 and look forward to providing you with further updates on this project.