Alo, an activewear company known for its matching workout sets donned by social media content creators, is investing in a permanent corporate flagship in Los Angeles after striking one of the area's priciest office deals this year.
The retailer shelled out $90 million, or $1,085 per square foot, for a notable office property in Beverly Hills, the high-end shopping enclave in Los Angeles County. It plans to make the 82,886-square-foot La Peer Building at 8942 Wilshire Blvd. its corporate headquarters.
That will mark a departure for Alo from its current headquarters down the street; it leases the entirety of a 57,000-square-foot building at 9830 Wilshire Blvd. that's well-known office and retail space. The site is home to the Alo Gym and a content studio, drawing a consistent roster of celebrity visitors and online influencers.
Alo appears to be taking advantage of discounted office pricing in the region to establish a permanent base. The deal marks a 16% discount from the last sale, in 2019. Still, the deal is the second-priciest office transaction this year in Beverly Hills, where climbing office demand and limited construction have edged the vacancy rate down to 15% from 17% a year ago.
“We’ve had a significant drought in investments for a while, but this deal is a sign we’re turning a corner,” Madison Partners founder and President Bob Safai, who helped represent seller Breevast U.S. in the deal, told CoStar News. “Beverly Hills is always an attraction for high-end investors because they see it as safe in good and bad markets."
A vacant trophy property
Alo, founded in Los Angeles in 2007, has grown from a yoga apparel startup into a global lifestyle brand with stores from New York to Dubai and a booming digital wellness platform. Its rise has coincided with a surge in U.S. athleisure sales, which Dimension Market Research estimates will grow from $154.6 billion in 2024 to $338.8 billion by 2033.
In October 2023, Alo's founders floated a stake in the company that valued it at $10 billion, according to Reuters. That May, company cofounder and Chief Executive Danny Harris told The Wall Street Journal that Alo achieved $1 billion in sales in 2022 — nearly tripling from the year prior.
The strength of the athleisure sector is now showing up in office transactions. The Alo deal comes a few months after competitor Lululemon signed one of Vancouver's biggest office leases in years, taking over a 289,557-square-foot building being vacated by tech giant Microsoft.
Alo plans to use its new Beverly Hills property as a consolidated home base for its corporate team as it scales its retail fleet, wellness offerings and international ambitions.
The newly acquired La Peer Building spans a full block between La Peer Drive and Almont Drive. The three-story property was completed in 1990 and designed by noted architect Richard Keating as the headquarters of Columbia Savings and Loan. It's listed by the Los Angeles Conservancy as a standout example of late-20th-century corporate architecture.
The building is vacant; tenant Paradigm Talent Agency departed to the Pacific Design Center in 2022.
“The building was one of the best turnkey buildings in Beverly Hills. It has been built out with the best materials,” Safai said.
Beverly Hills boom
The purchase adds to a burst of property investment in Beverly Hills across asset classes despite broader uncertainty in the Los Angeles office market. Fashion Nova paid $118 million, or $676 per square foot, last year for a nearby office property that also serves as its headquarters.
Institutional capital is reentering the market as well. Kilroy Realty spent $205 million, or $707 per square foot, on a 290,000-square-foot building in Beverly Hills at 345 N. Maple Drive, marking one of the priciest Los Angeles area deals of the year.
In another notable move, an entity affiliated with Corinthia Hotels International acquired the office building at 9800 Wilshire Blvd. and an adjoining parking structure. Kuwait-based Action Real Estate Co. and The Gores Group are among the investors involved.
It's unclear when Alo plans on moving into its new digs. The company, acquired by Color Image Apparel in 2014, moved into its space in 2022, though the lease's expiration date isn't clear.
"Alo has poured a lot of money into their existing headquarters so it would be interesting to see what they do with the new space," said Carl Muhlstein, principal at Burbank, California-based Muhlstein CRE, who helped broker the sale of the La Peer property in a previous deal.
Alo opened its first store in Beverly Hills in 2017, a decade after launching as a yoga-focused apparel brand in Los Angeles.
The company has since expanded into a global retailer with more than 80 locations, including flagships in New York, Miami, Austin, Texas, and London, with stores planned in Seoul and Dubai.
For the record
In addition to Safai, Matt Case and Brad Schlaak of Madison Partners represented the seller in the deal. Jack Harris and Michael Fahimian of The Beverly Hills Estates represented the buyer.