As we near the end of another year, we thought it would be interesting to talk about some trends we’ve seen as California tenant improvement contractors in 2017. Lucky for us, it’s been a great year for commercial renovations, which happen to be our specialty. But what kind of trends are we seeing overall in tenant improvement construction in CA?
Brick & Mortar Still Has a Pulse
Over the last couple years, Los Angeles retail has seen its share of national chains close. One explanation you’ll hear for this is the belief that brick and mortar stores are yesterday’s news. All shopping today can be done online in your pajamas. Retail as we’ve known it is dead.
However, the reports of brick and mortar’s death have been greatly exaggerated. The large national chains may be falling by the wayside but the metro areas of LA have seen an influx of new stores and shops opening to replace them. In fact, some e-commerce brands – like Warby Parker – are actually opening brick and mortar storefronts.
Online shopping isn’t going anywhere. It will most likely continue to grow. But can the online shopping experience actually get people into physical stores as well? Can the two be integrated to become some sort of super personalized physical yet interactive shopping experience? Large metropolitan areas like Los Angeles are the perfect testing ground for established online brands to try this sort of thing.
It should also be noted that independently owned boutique shops on suburban main streets and downtown side streets are prospering even as shopping mall anchor stores shut their doors.
This is clearly something to watch moving forward. What we’ve learned in 2017 is retail at the moment is still strong despite being in a state of flux.
There a lot of boutique restaurants and bars/grills shifting from their core concept into entertainment-driven ones. They’re still serving food and alcohol, but they’re also hosting live music or stand-up comedians. These kinds of establishments are ideal for mixed-use commercial developments where housing, work, and entertainment meet. Restaurants, pubs, theaters, and music venues aren’t necessarily looking to lease stand-alone buildings anymore.
Vacant Office Space is a Rare Commodity
The economy has been strong throughout 2017. When the economy is strong, it is no longer an office tenant’s market. It becomes a landlord’s market. This means quality office space vacancies this year have been harder to come by.
The good news is there are also many adaptive reuse projects in LA at the moment. Many of these projects involve converting historic structures which were once the home of factories and warehouses into office space. These offices; however, are a hot commodity in Los Angeles and tend to have tenants in place prior to even being completed. This is why us and other Los Angeles area tenant improvement contractors are seeing an increase in another type of adaptive reuse project – the conversion of old second or third story apartments into usable modern office space.