Tishman Speyer’s 217K-SF Office Project in Downtown LA Fizzles
The developer initially submitted plans for the project in 2017
By Nick Trombola June 6, 2024 4:27 pm
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A sprawling office development plan on the edge of Downtown Los Angeles has officially bit the dust as the office market continues to struggle.
The L.A. Department of City Planning late last month ended entitlement proceedings for the proposed project at 2159 East Bay Street, in L.A.’s Arts District, which would have featured 217,189 square feet of office space and 5,000 square feet of retail space. Urbanize first reported the news.
New York-based Tishman Speyer submitted plans for the 1.7-acre site in 2017. The developer planned to demolish four warehouses at the property that previously served as the former headquarters of Elon Musk’s Hyperloop One, a high-speed transportation concept for passengers and freight.
The office market in the Arts District was hot at the time. Spotify had signed for over 100,000 square feet at 555 Mateo Street, while Warner Music Group scooped up the 255,000-square-foot former Ford factory at Seventh Street and Santa Fe Avenue for a new headquarters. Tishman wanted in on the action.
Yet, in a post-pandemic world, the office market has changed dramatically. With remote work remaining a strong trend in Southern California, the office availability rate in Greater L.A. reached a record high of 27.6 percent last quarter, according to a market report from Savills. Severe declines in office property values also leave little wonder why Tishman would allow its application to lapse.
A spokesperson for Tishman did not immediately respond to a request for comment.
Still, the developer hasn’t entirely pulled out of Southern California. It’s currently in the midst of building a four-building, 3.1-acre mixed-use project in Downtown Santa Monica, which will feature 617 housing units and 31,000 square feet of retail space.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
