When you do a search for “commercial real estate near me”, you’re probably not thinking of that grungy alleyway you pass every day. Who can blame you? Most listings prioritize storefronts on busy boulevards. Yet, the most attractive deals in Los Angeles are often tucked away behind those listings in alleyways you may have only considered as a shortcut before today.
The Overlooked Arteries of the City
Experts estimate that LA’s alleyways constitute well over 12,000 city blocks, amassing 914 linear miles. All the way back in 2008, the abundance of alleys inspired USC to run its own research, with the results suggesting that, situated end to end, the city’s alleys would only encompass three square miles. But this research also underscored how little these alleyways were actually utilized.
The same data suggested that LA’s alleys were only used about 20% of the time. And even then, this was typically just a lone person driving or walking through the alley. What’s the significance? Commercial spaces are sitting alongside large gaps of underutilized space. And this presents an interesting opportunity for a property owner.
Proof of Concept in a Hollywood Alleyway
Want proof? You need only look as far as Hollywood to find plenty of it in the East Cahuenga Pedestrian Alley. Having been dubbed “heroin alley” by a local resident prior to its renovation, this was not a space that would have topped the listings in a “commercial real estate near me” search.
However, after an idea was proposed by the Hollywood Business Improvement District, developers brought in new lighting, manicured landscaping, and even permeable pavement that wouldn’t collect water on its surface. Since introducing improvements in 2012, this alley now hosts a regular farmers market as well as outdoor dining options, attracting crowds that would have seemed unimaginable years earlier.
Small Owners: Reconsider Those “Commercial Real Estate Near Me” Search Results
Don’t think that because we chose a Hollywood success story as our example that you need a Hollywood-sized budget to start considering alleyway opportunities as part of your future “commercial real estate near me” searches. Businesses that border an alleyway appeal to small owners for a number of reasons, chiefly:
Low Cost of Entry
Newer entrepreneurs like to kick the tires of a location a bit before committing to a long-term lease. Therefore, alley-adjacent businesses and rear lots tend to attract food pop-ups, boutique shops, and other tenants looking to lower their cost of entry. This may not always be a reliable demographic, but it is an active one with the potential to transform into a longer-term relationship.
Thinking Outside the Alleyway, Inside the Alleyway
The utility of an alley may all come down to how creative you can get. If you have a rear lot, side yard, or back area, consider whether it could be reimagined as a seating area or event space. Can it support tents and kiosks? What kind of permits do you need to secure? Is it worth the investment?
The Value in a Secret
Everyone loves a good secret, and that’s what an alleyway business can feel like. You have to wander off the beaten path to discover these businesses. For some shoppers, that’s an investment in itself. When they find value in a tucked-away shop or restaurant, they’re more likely to keep it top of mind, further supported by the exclusivity that comes with obscurity.
Look Before You Leap
Before you go charging into an alleyway improvement project, you need to recognize what’s actually possible for your space. Since alleys straddle the line between public and private property, matters can quickly become complicated. Before you get too far into the planning phase, research:
- Who officially owns the alley and any easements
- Local zoning and permitting (especially if food will be involved)
- Fire, safety, and accessibility regulations
- Neighboring owners or business improvement districts open to partnership
It can seem daunting, but most of this can be handled with a quick call to your city planning department and a qualified land-use attorney or architect. Don’t know where to start? Call your trusted commercial real estate agent for additional help.
Sometimes, Success Happens in the Shadows
It’s easy to disregard alley-adjacent listings when doing a dive into a “commercial real estate near me” Google search. But not every success story takes place on the main strip. Just as you can’t judge a book by its cover, you can’t judge a property without considering what’s behind it. And, in some cases, it may be a severely underutilized alleyway.
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