Buy now; figure it out later

Trust Building

UCLA seems to be in real-estate purchasing mode. First there was the $80 million purchase of a defunct Catholic college in Palos Verdes. As we have noted, it is unclear that a substantial number of students could be added there and there are major problems of accessibility to Westwood. Now there is the purchase in downtown LA of the Trust Building. 

With the subway under construction, at least some accessibility issues can be resolved. The account from the LA Times below does not give the purchase price. But it does say the previous owner paid $80 milion and then put in $40 million in upgrades. Commercial office buildings in downtown LA have high vacancy rates - Bloomberg puts the rate at 30%* - thanks to the pandemic/work-from-home movement so UCLA may have gotten the latest purchase at a bargain price. 

Packing them in.

If the building is initially used as an Extension location, the issue of connecting to the Westwood campus is reduced, although the reduced presence of office workers downtown could shink potential demand for Extension courses.  But there are hints in the story below that the building could be used for regular classes. So, although to a reduced extent compared with Palos Verdes, there could be accessibility issues, even with the subway.

In short, one wonders about the strategy of buying distressed properties and then trying to figure out what to do with them. While the ability to pack more undergraduates and graduate students into the Westwood campus is limited, will the legislature be happy with a tiered system in which some students get to Westwood and others are put somewhere else?

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*https://www.bloomberg.com/graphics/2023-downtown-la-office-vacancy-sets-record-causes-distress/.

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From the LA Times:

In another milestone move to expand its reach, UCLA announced Thursday that it has purchased a landmark building in downtown Los Angeles for satellite classes, aiming to widen access at the nation’s most popular university and help revitalize the city’s historic core.

UCLA purchased the 11-story, Art Deco-style Trust Building on Spring Street and expects to begin classes in it later this year — initially through its large Extension program. But Chancellor Gene Block said in an interview that the university has “not precluded” eventually developing the site, renamed UCLA Downtown, to accommodate more undergraduate and graduate students with possible housing nearby.

The purchase comes nine months after UCLA bought two large properties owned by Marymount California University, a small Catholic institution in Rancho Palos Verdes that closed its doors last year. The $80-million purchase of Marymount’s 24.5-acre campus and an 11-acre residential site in nearby San Pedro marked the university’s most significant expansion to help meet the burgeoning demand for seats.

UCLA, the most-applied-to university in the nation, drew nearly 150,000 first-year applications for about 6,500 spots in fall 2022 and nearly that many for fall 2023 — sparking angst among growing legions of rejected Californians and pressure from state legislators to reduce the number of out-of-state students...

The sellers, Rising Realty Partners and its financial partner Lionstone Investments, bought the building in 2016 for $80.4 million, according to real estate data provider CoStar. Rising Realty, which is headquartered in the building, performed an estimated $40-million makeover that brought it up to modern earthquake safety standards and restored original features such as gilded ceiling decorations that were painted over in late 20th century renovations...

Full story at https://www.latimes.com/california/story/2023-06-29/ucla-to-expand-in-downtown-la-with-purchase-of-historic-building.