A major Downtown LA office-to-housing conversion is moving forward, signaling potential relief for the city’s housing shortage and struggling commercial real estate market. Jamison Properties, the largest Korean American real estate company, is preparing to transform the 32-story LA Care Tower into 686 apartment units, a redevelopment move that could serve as a turning point for Los Angeles’ office sector.
According to the LA Department of City Planning, the project had, as of last February, received partial approvals covering demolition, floor plans, and height configuration. Garrett Lee, president of Jamison Properties, told the Los Angeles Times that the goal is to convert the 40-year-old building into apartments competitive with new luxury housing being built across the city.
Industry experts see such conversions as a way to address multiple challenges at once — easing the housing crisis, halting the decline in office building values, and boosting tax revenue. A study by BAE Urban Economics, commissioned by the Central City Association (CCA), found that 54 downtown office buildings are at risk of devaluation, potentially leading to $70 billion in lost asset value and $353 million in reduced property tax revenue over the next decade.
The report estimated that converting just 10 large office buildings to residential use could raise asset values by $12 billion, increase annual tax revenue by $46 million, and create more than 3,800 new housing units. Downtown’s apartment occupancy has stayed above 90% for over a year — higher than pre-pandemic levels — while 22% of Los Angeles’ new housing in the past decade has been built there.
Several older high-rises, including Gas Company Tower, 777 Tower, and Union Bank Plaza, are considered strong candidates for conversion. Built between the 1970s and 1990s, these towers can accommodate features like balconies and operable windows. The 777 Tower’s separated elevator zones even allow for partial conversions, with some floors remaining offices and others becoming residential.
However, private developers remain cautious, citing high costs that often exceed projected rental income. The industry is urging the city to consider financial incentives modeled after other cities, such as property tax abatements in New York, Washington, and Boston; transfer tax exemptions in San Francisco; and targeted tax incentives in Chicago.
Rachel Freeman, deputy mayor for economic development, said the city recognizes office-to-residential conversion as a vital tool for revitalizing downtown and easing the housing shortage. She added that Los Angeles is reviewing possible policy changes and financial support measures to encourage such projects.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
