RICS’ Southern California Chapter held its first Development Series event in Los Angeles on November 20, 2014, featuring Korean Air’s huge and innovative Wilshire Grand Center.
Currently, it is under construction and is expected to open in early 2017. Once completed, it will be the tallest building west of the Mississippi, towering over downtown L.A. at 73 stories.
This Development Series seminar brought together more than 70 attendees representing diverse disciplines in the land, construction and property industries. Gathered at the Ernst & Young conference center in downtown L.A., attendees were treated during the event to a birds-eye view of the construction site right from the conference center windows. Turner Construction switched on the site’s lights especially for the event.
The landmark Wilshire Grand project features many unique elements. For example, it’s a single tower with three different uses: hotel, retail and office. While this is a very common combination in Europe, Asia and the Northeast that’s becoming more common in other parts of the country, it still isn’t as common here in Southern California.
“In addition, the Wilshire Grand is being built within the context of revitalizing downtown L.A., and a project of this scale should have a significant impact on downtown by enhancing both the city’s skyline and streetscape,” Baker continued. “Replacing a tired old 13-story hotel with this striking, innovative, multi-use structure should help liven up the downtown financial district.”
Multi-use aspect of project makes valuation “challenging and interesting”
“From a valuation perspective, incorporating the three distinct uses in one structure – plus extensive signage as a fourth – made the project challenging and interesting,” Baker continued. “This isn’t your standard cookie-cutter suburban hotel project – it’s a unique, innovative, dense, mixed-use urban project with many elements in one structure that required lots of out-of-the-box thinking to do a proper and thorough valuation.”
In addition, the project will benefit from a reduction in the hotel “transient occupancy tax”’ (or hotel bed tax) over a 25-year period, which also had to be considered in the valuation of the project,” Baker added.
My firm was very excited to host as well as sponsor the event, especially since the Wilshire Grand is a record-breaking building located right outside our offices in L.A. RICS plans to put on similar events in all cities in the Americas where it has a major presence because the response from the community has been so positive to these sessions.
Peter Smith co-moderated the seminar and is RICS’ U.S. National Chair.
The L.A. Development Seminar was the fourth so far in a series focusing on such major projects, with three previous events in Toronto and one in Chicago, all in 2014. Chicago attracted 98 member and colleague attendees and LA had over 70.
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