LOS ANGELES—Most developers have overlooked the small-box creative office space, but newcomer HQ Creative Office has found loads of demand—and yields—in the niche market, GlobeSt.com reports exclusively. The developer came on the Los Angeles scene three years ago when he saw the intense demand for tailored, high-end creative office. Now, he has a portfolio of bespoke creative office buildings ranging in size from 8,000 square feet to 30,000 square feet, and he is garnering well above market rents.

"I am an entrepreneur but more of an opportunist than anything else," Robert Herscu, the CEO and founder of HQ Creative Office, tells GlobeSt.com. "I went on a crusade over the last three-and-a-half year period to buy 12 buildings, and I kept it under 40,000 square feet, and I began to develop very high end creative office that was more akin to high-end homes. I found architects in the high-end residential home world, and it has evolved over the last three years so that now we sort of do everything for the tenant. They can just bring in their toothbrush and start to work. We are not a typical developer. We build very high end and on spec, and we build out the whole space."

Herscu saw the potential a few years when he was selling his own creative office space, and had 30 offers on the small but beautifully designed property. He looked deeper into the market and found that there was no commercial development. "Los Angeles is one of the hotbeds of venture capital funding in America, but the only product that they were building a few years ago was multifamily," he says. "Commercial development had come to a halt because you couldn't get any financing for it."