In the Los Angeles suburb of Altadena, one of the 40 commercial buildings damaged in the January wildfires is testing the sales market, offering a glimpse of the challenges in an emerging rebuilding process.
Twins Vachig and Vahid Garabedian — owners of the 3,000-square-foot office building burned in the Eaton fire — have decided, for now, to sell rather than wait out what can be a long and costly road to redevelopment. They relocated their legal media services firm from the 9,000-square-foot site at 2117 Lake Ave., about 15 miles from downtown Los Angeles, to Burbank. The asking price is now $875,000, down from $1.125 million in early June.
“It’s just dead money sitting there,” said listing broker Kirk Garabedian, director of commercial property investments for KW Commercial and the owners’ brother. “So for us, it made sense to take the equity and go do something else with it.”
While some homeowners signal plans to rebuild from the Eaton wildfire, commercial property owners are weighing whether to stay or sell in a market full of uncertainty about density allowances, support systems and demand. There’s a lot at stake in the decisions: The Eaton Fire alone destroyed 5,600 single-family houses, 261 multifamily units, 161,000 square feet of retail space and 38,000 square feet of offices, according to officials and CoStar data.
The owners of the Lake Avenue property, who bought it with a federal Small Business Administration loan several years ago, aren’t ruling out building something themselves if no suitable buyer steps forward. A potential plan would involve a small retail space on the ground floor — perhaps a café or bakery — and a few residential units above, effectively a modern version of what the corridor once offered.
The commercial stretch along Lake Avenue, once a patchwork of mechanics shops, small offices, mom-and-pop restaurants and single-story retail, sits in varying states of destruction or vacancy. A nearby Aldi grocery store remains damaged and shuttered, while a Grocery Outlet down the street is open with a large vinyl banner stretched across its facade reading “Altadena Strong. We Will Rebuild.”
Potential uses
The for-sale lot on Lake Avenue is zoned C3, one of the most flexible commercial zones available in Los Angeles County, brokers note. That means developers can pursue a variety of uses, from ground-floor retail to high-density apartments. But Garabedian said the 52-foot-wide parcel presents a design challenge for developers aiming to build tall.
“The majority of buyers that are interested in this lot want super high density,” Garabedian said. “People are talking about building 30 units, 40 units, I mean some insane number of units on such a small parcel.”
So far, interest has come largely from multifamily developers, many of whom are exploring state incentives that allow reduced or no parking requirements in exchange for affordable housing. Still, Garabedian expressed skepticism that the neighborhood is ready to support a denser population, with parking and traffic raising concerns.
“People still need to work and still need to have conveniences,” Garabedian said. “Where are all these people parking?”
Commercial neighbors are also opting to stay. A mechanic and dry cleaner just south of the parcel are reportedly planning to rebuild, while an owner to the north has drawn up plans for a modest mixed-use project. One other burned commercial lot is on the market in Altadena: a 0.18-acre lot at 1210 N. Altadena Drive that is zoned for multifamily, according to LoopNet, CoStar's online commercial property marketplace.
“The general consensus is we don’t want to sell,” Garabedian said. “It’s going to be a mix — an eclectic mix — of various developments.”
Road to recovery
After a thorough cleanup led by the Army Corps of Engineers that removed toxic substances and cleared almost all lots, much of Altadena remains quiet.
The for-sale commercial lot is a bare patch of land across from a school in the shadow of a billboard for a homebuilder. Next door, redevelopment plans remain theoretical, with most property owners still navigating insurance settlements and rising construction costs, Garabedian said.
Local officials have been proactive, according to Garabedian. Shortly after the fires, the county opened a centralized permitting center in Altadena, where property owners could meet with planners, engineers and building officials.
Still, rebuilding timelines are unclear, especially on the residential side, where owners face limited financing options and rising costs.
Of the 1,319 rebuild applications in the Eaton Fire area, only 106 building permits have been issued, taking an average of about 60 days to get through the process, according to the county’s permitting progress dashboard.
“This is not going to be a quick process by any means,” Garabedian said.