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WWD: What are some of the changes you have seen in the retail real estate landscape in downtown Los Angeles?
Bradley Luster: The downtown L.A. retail landscape has changed in a few ways. Major big-box retailers such as Home Depot, Costco, Lowe's Home Improvement and others have taken to finding space downtown by working with private developers and city agencies to find opportunities. Restaurants, fast food and some upper-end types have also come into downtown, and [they] continue to look for opportunities.
Also, big developers, both national and international, are looking for opportunities in downtown Los Angeles. The pressure is on traditional retailers to compete with minority-type businesses that understand the nature of downtown and the multicultural makeup of the various districts.
WWD: What is the current "mood" within the retail real estate market?
B.L.: In regard to attitude, the market remains hot in downtown Los Angeles. Retail and showroom spaces are two of the hottest markets, and the properties that are available are still demanding sellers' market prices. This is under pressure as lending is drying up. The credit crunch could be really felt if not resolved soon as downtown Los Angeles is not immune to a worldwide financial crisis. But the demand is booming at this time.
WWD: How is Major Properties handling the demand coupled with nervousness about the economy?
B.L.: The market is in transition. A shift in ownership comes when you have a credit crunch that can wipe out those who are overleveraged and those with cash can buy into the market.