The downtown development of Playa Vista, a mixed-use development in west Los Angeles, dubbed 'Silicon Beach' was long-delayed by environmental and archaeological challenges before a section of the expansion was sold to Invesco Real Estate last month.
Developers originally conceived of turning 1,087 acres of a former airfield into a mixed-use community back in the 1970s. However, environmentalists protested the potential negative impact of development in cases that wound through the state courts. Construction for Phase I of the project was also delayed in 2004 when workers uncovered a 200-year-old Indian burial ground containing the remains of at least 160 people. Under state law, the cemetery had to be resettled elsewhere on the property.
Yet, despite the hurdles, a long list of investment firms and developers have touched parts of the huge project. Lincoln Property Group, one of the four partners that sold Runway to Invesco, got involved in May 2006 with partner ASB Capital. The joint venture first bought and developed 12 acres zoned for office space and purchased another 12 acres in October 2010, which they developed and sold for movie giant IMAX’s West Coast headquarters. In 2014, the partners sold the remaining undeveloped office land to Google for $120 million.
In September 2012, Lincoln teamed up with private equity real estate firm Alcion Ventures and Phoenix Property Company to purchase 14 acres of land, which the partners turned into Runway. Runway is a retail, residential and office development that is still under construction. Paragon Commercial Group joined the mix to develop the retail component. The groups began construction in April 2013, spending $300 million on the mixed-use development. Runway now includes 420 apartments, 33,000 square feet of office space and 217,000 square feet of retail space, anchored by Cinemark Cinema, upscale grocery store Whole Foods and CVS Pharmacy.
Runway was then sold by Alcion and its development partners for $475 million to Invesco, which aims to turn the development into the hub for the whole Playa Vista area going forward.
Access to the beach, retail and Los Angeles International Airport, just five miles away, does not come cheap: Runway’s one-bedroom units start at $2,800 per month. The high price tag comes with perks, however. Apartment amenities include two fitness centers, two terraces with pools and a gaming area. Despite the price tag, renters are flocking to Runway, which was completed in phases last year. Its retail component has 90 percent occupancy, according to Lincoln Property, and the apartments are about 50 percent leased.
Retail and residential occupiers have also evidently not been dissuaded by what architecture critics have bemoaned as a poorly-conceived neighborhood, at least with regard to visuals. Local tabloid LA Weekly wrote an unrestrained feature on the development in 2014, calling Playa Vista “a mash-up of New Urbanism and Orange County, a park-filled small town populated mostly by tacky, mass-produced condominiums in clashing styles. The buildings around the park are a confused pastiche of Spanish Colonial, Italianate and '90s contemporary architecture, with a smattering of dissonant trellises, decorative arches, chamfered corners and slate-tiled walls thrown in for good measure.”
Invesco is tasked with further development at Runway, and will presumably attempt to avoid the aesthetic mistakes of past developers. The second phase of Runway’s development includes an additional 2,180 residential units, 200 units of senior housing, a community center, 11.5 acres of parkland and 25,000 square feet of additional office space.
The Atlanta-based real estate arm of investment manager Invesco will have to hope that there are no further delays to Runway’s takeoff.
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