Landlords are making renovations to attract creative users. “Brookfield has a concept that they are building that is a co-working conferencing site,” says Sullivan. “In other cities, institutional owners have done a lot to make their properties more exciting to creative users.”

LOS ANGELES—Downtown Los Angeles wants creative tenants, and to stay competitive with surrounding markets, it needs them. The submarket has an office vacancy rate that trends above the city average, but with an inventory of institutional office buildings, the market hasn't appealed much to creative users.

“Every institutional owner downtown is thinking about what they could do to make their buildings more attractive to creative tenants,” Mark Sullivan, EVP, director and regional manager at Savills Studley, tells GlobeSt.com. “The reason why primary Westside, El Segundo, Playa Vista and even Hollywood have become strong markets is that they have appealed to creative users. If you look at dynamic job growth, it is driven by entertainment, technology and new media. The core of Downtown has not gotten its share of that business.”

To attract new tenants, landlords are offering big concessions. In fact, concessions recently reached $100 per square foot. However, it hasn't helped to attract creative users to move into institutional properties. “People that are making real estate and employment decisions at companies feel that they will be at a disadvantage if they locate in an institutional quality high rise with professional service neighbors,” Sullivan says. “In many instances, they are paying up not to be in an institutional quality building. If you are a little off the beaten path, you may get noticed more by the creative user. We haven't seen many exciting transactions from game-changing users in the core of Downtown.”

Last year, Warner Music signed a 250,000-square-foot lease in the Arts District, a deal that was suppose to serve as a catalyst for the creative office in the Downtown market; however, Sullivan says that outside of the Arts District, the deal hasn't helped spur creative activity. “That was a great deal for the greater Downtown market,” he says. “It is bringing a lot of jobs to greater Downtown, and if you have a restaurant or a hotel Downtown, that was a nice transaction because it is bringing jobs and visitors to the marketplace. It just didn't benefit the 29 or 30 institutional quality buildings in the market.”

Landlords are making renovations to attract creative users. “Brookfield has a concept that they are building that is a co-working conferencing site,” says Sullivan. “In other cities, institutional owners have done a lot to make their properties more exciting to creative users.”