Goodbye, water cooler; hello, pool: More Los Angeles offices are becoming apartments

By Roger Vincent

Los Angeles Times

September 14, 2022

Texaco never did things on a small scale.

So when the Texas oil giant needed a Western headquarters in the 1950s, it turned to prominent architect Welton Becket, who designed L.A. landmarks including Hollywood’s Capitol Records building and downtown’s Dorothy Chandler Pavilion.

Becket created a grand high-rise shaped like a T (when viewed from the sky) for a spot on Wilshire Boulevard, Los Angeles’ storied thoroughfare. It rose next door to what was then the Ambassador Hotel, one of the city’s most exclusive inns, where celebrities cavorted at its legendary Cocoanut Grove nightclub.

It’s hard to imagine what office toilers from the “Mad Men” era would think of the place today.

Known as the Crosby, the building has amenities such as a rooftop swimming pool with cabanas, fitness center, fire pits and a karaoke room. Monthly rents start around $2,250 and hit $6,500 for a penthouse.

The former Texaco high-rise is part of a national push to convert aging office buildings to residential use as demand for housing surpasses the need for offices in many locations.

Turning old office buildings into apartments or condos is hardly new. But as companies permanently adapt to remote work, expectations for cutbacks in office rentals have spurred new interest among landlords in switching the uses of their buildings in the years ahead.

Most haven’t acted yet because overall demand for office space as COVID-19 wanes is yet to be established, but candidates for conversion are thick on the ground.

Think tank Rand Corp. identified in a March study 2,300 underutilized office and hotel properties in Los Angeles County that could be converted to housing. Most of them are older office buildings with big chunks of unrented space.

If all the underused buildings were converted to housing it would add as many as 113,000 units, Rand said, about 9% to 14% of the housing Los Angeles County needs to produce over the next eight years to meet demand.

Some neighborhoods such as downtown L.A. and Koreatown, where the Crosby stands, have concentrations of tall, aging office towers suitable for housing but many other candidates are less obvious, architect Karin Liljegren said.

She specializes in conversions and is bedeviled by what she sees driving around L.A.

“There are opportunities everywhere,” Liljegren said, such as small office buildings on less-traveled streets. “It’s just that people don’t have the vision.”

Among those who’ve taken on conversions at a large scale are Jaime and Garrett Lee, two leaders of the Jamison real estate empire founded by their father, David Lee. The elder Lee is an internist and immigrant from South Korea who bought up struggling office high-rises in Koreatown after the 1992 Los Angeles civil uprising depressed their values.

He went on to acquire many other large commercial buildings in the Los Angeles area and became one of the region’s largest commercial landlords, later expanding into developing new residential projects including the luxury Circa apartments downtown and Kurve on Wilshire near Koreatown.

In 2013, Jamison took a chance on converting the use of one of its office towers, the former headquarters of U.S. Borax on Wilshire Boulevard dating to 1963. Citing rising crime as one of the reasons, Borax left for Valencia in the early 1990s and the building was not much of a draw for business renters in the years that followed.