City’s Economic Development Director Recaps Recent Commercial Real Estate and Leasing Activity in Pasadena

A recent memorandum by City Economic Development Director David Klug has revealed details about investments in commercial real estate, leasing and retail activity for the months of August, September, October and November in Pasadena. 

Numbers in the report indicate that over 75,000 square feet of office space was leased out by 4 major companies in the last four months. 

JP Morgan is leasing 30,000 square feet at 177 E. Colorado Blvd., Philadelphia Insurance Companies is leasing 13,000 square feet at 800 E. Colorado Blvd., Premier Workspaces is leasing 16,702 square feet at 301 N. Lake Ave., and Reliance Steel and Aluminum is leasing 16,285 square feet at 55 S. Lake Ave.

But nationally there is currently 232 million square feet of surplus commercial real estate up for sub-leasing, according to Elizabeth Ptacek, senior director of market analytics at commercial real estate information and analytics company CoStar, CNBC reported. 

“To put those numbers into perspective, Amazon’s HQ2 is 8 million square feet. Even more telling, the 232 million square feet is twice the level of surplus from before the pandemic,” the CNBC report said. 

The report mentions a move to hybrid work models and higher interest rates as some of the reasons for the surplus commercial real estate space. 

Retail

Despite inflation and cost of living concerts, retail sales have risen in October. 

Nationally, CoStar reported that retail sales rose by 1.3% in October and were 8.3% higher than last year’s levels. The commercial real estate information and analytics company added that “Inflation played a large role in the increase, clearly, as the consumer price index (CPI) rose by 7.7% over the year in October. But even after accounting for rising prices, retail sales still grew an impressive 0.9% during the month.” 

They also stated that consumer spending drives about two-thirds of the economy, so good news such as this is a sign that the economy should do better in the fourth quarter than had been expected. 

Locally, the demand for retail space is rising. 

“Demand for retail space continues to rise in Old Pasadena. Several brokers are touring potential retail tenants, but space is limited,” the report stated.  

Due to limited space, Klug’s staff encouraged brokers to consider other business districts in the city as potential sites, the report said.

In other retail space developments, a Canadian developer, the Onni Group, acquired Paseo Colorado, the shopping center in downtown Pasadena, for $103 million in a foreclosure sale in October, the report said. Onni has significant real estate holdings in the Los Angeles area, including the Burbank Towne Center.

Klug reported that Doc Martens will be moving to 17 E. Colorado Blvd. this month, Lather has relocated to 40 W. Colorado Blvd., and Alo Yoga will be moving into 3 W. Colorado Blvd. Brilliant Earth will be starting their tenant improvements at 29 Miller Ave., Klug’s report said.

Commercial

The Economic Development Update also reported several key commercial spaces that were recently sold and others that are currently on the market.

The key commercial spaces coming on the market for sale are 

• The former Fedde Furniture site at 32 N. Sierra Madre Blvd. will be on sale for $8 million, 
• Five ground-floor retail units with second-story office suites at 738-742 E. Colorado Blvd., asking price is $7.25 million, 
• A 90-unit condominium development at 253 E. Los Robles Ave. on sale for $12.75 million.
• 254 E Union St (west of Post Office/investment sale) — Asking $12,900,000 
• 1539 Lincoln Ave (currently owner-occupied and operated as tire shop and part of a three-property portfolio sale) — Asking $5,000,000

The two properties that sold are: 

• AvalonBay Del Mar Station apartments at 265-276 S. Arroyo Parkway were sold for $172 million to Fairfield Del Mar Station, LLC.
• Westin Pasadena at 191 N. Los Robles Ave. was sold for $190.8 million as part of a portfolio sale to Brookfield Asset Management Inc.,

Small Business Saturday

The Economic Development Update also included a report on Pasadena’s Shop Small Business Saturday, held on Nov. 26, with the theme “Authentically Yours, Pasadena.” 

Held in partnership with the Pasadena Convention and Visitors Bureau, this holiday shopping campaign continues through the holiday season and “amplifies the people, places and great finds that gives Pasadena its vibrancy and authentic flavor.” 

The report said 27 small and independent businesses throughout the city served as official campaign welcome stations and were giving away “Authentically Yours, Pasadena” canvas shopping totes as free gifts.

“Small businesses reported strong sales, exceeding their expectations and daily goals,” the report said. “Overall, the ‘shop local’ campaign brought new customers and awareness to these independent businesses in Pasadena, and according to the feedback received from the businesses was a success.”

This year, the Economic Development office is also sending out “Gratitude” holiday cards as part of the business outreach program.

The full Economic Development Update will be presented before the City Council’s Economic Development and Technology (EDTech) Committee during a special meeting on Tuesday, Dec. 6, starting at 4:30 p.m.