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Blockbuster Multifamily Projects Coming to Tinsel Town

Iconic District is Becoming a Haven for Young Tech and Entertainment Industry Renters
April 4, 2018
Multifamily developers and an influx of tech- and entertainment savvy renters are saying hooray for Hollywood.

The neighborhood has become one of Los Angeles’s hottest spots for renters, with a slew of new multifamily projects coming on line or in the pipeline.

For example, Related California’s Argyle House, a 114-unit project at 1755 Argyle Ave. near the famous Capitol Records building, is slated to be completed next month.

Large Architecture designed the one-, two- and three-bedroom apartment project with interiors by Marmol Radziner.

A project that is in the pipeline is the $1 billion Crossroads Hollywood, which would be built on the site of Crossroads of the World at 6671 Sunset Blvd. The plan is to preserve the historic site, according to Kyndra Casper, a land use attorney with DLA Piper.

Casper's client, Los Angeles-based Harridge Development, aims to build a mixed-use development with three towers, including a 308-room, 26-story hotel, and a 950-unit multifamily component in two towers that would include 760 apartments in the 30-story tower and 190 condos in the 31-story building.

There are also smaller buildings that will encompass the nine-building project, Casper said. Commercial space will be in most of the buildings.

“Originally it was built as the first outdoor pedestrian mall basically in the country,” Casper said of Crossroads of the World. “Over the years, it has kind of turned into some office uses. It is gated and private, and some people don’t even know you can actually go in there and walk around."

"We want to take down the gates and bring it back to its original retail and commercial heritage to make it back into an outdoor pedestrian shopping center," Casper said.

Casper said Harridge Development CEO Richard Schwartzman has been eyeing the site for more than a decade.

“If you look at Hollywood, you can see that there’s been redevelopment in a lot of areas but not a central piece," Casper said. "[Schwartzman] thinks this is one of the last remaining pieces of Hollywood that hasn’t really gotten revitalized."

A few blocks down, Amoeba Music, at 6400 Sunset Blvd. across the street from the CNN building, may give way for a multifamily tower if Los Angeles-based GPI Companies has its way.

The developer has filed plans with the Los Angeles Department of City Planning
to demolish the approximately 50,000-square-foot, 38-year-old building and construct a possible 28-story multifamily tower.

GPI Companies purchased the property three years ago for $34 million, according to CoStar data. Johnson Fain is the architect.

The developer is working on securing the entitlements, according to Matthew May, a broker for the sale of the Amoeba Music property when it was purchased by GPI Companies.

If approved, the 28-story project would include 232 residential units with ten set aside for affordable housing, 32,117 square feet of open space and 7,000 square feet of commercial space, according to an initial study filed with the Los Angeles Department of City Planning.

Another multifamily property, 900 LaBrea, is being built by Los Angeles-based CIM Group. Shubin Donaldson is the designer for the seven-story, 85-foot tall, 150,000-square-foot mixed-use building.

Southblock, the second phase of one of the biggest developments, is being built by DLJ Real Estate Partners and Clarett West Development.

It is directly across the street from their first project, the 535-unit Eastown at 6201 Hollywood Blvd., which opened about three years ago.

Residents will be able to move into Southblock’s residential units this August, according to Frank Stephan, senior managing director with Clarett West Development.

The $200 million development at 6200 Hollywood Blvd., will include 507 units and 56,000 square feet of retail. It consists of four, seven-story buildings by architect Van Tilburg, Banvard & Soderbergh and is being built across the street from the Pantages Theater.

Tilberg said Hollywood has a lot going for it.

"We think Hollywood is a great market," Stephan said. "It's centrally located. It has good transit options. It has commitment from major companies in the entertainment industry."

That includes Netflix which relocated to Hollywood last year from Beverly Hills.

Joseph Mariani, associate executive director of the Hollywood Business Improvement District, said companies coming into Hollywood are incorporating different kinds of housing, including workforce housing and permanent supportive housing, which is a good thing.

"We’ve seen a huge boom in workforce here whether it be Viacom coming into town or Netflix, we’ve had 700,000 square feet of new office space that was constructed and finished in 2014," Mariani said. "We have another 1.2 million square feet of office space that’s under construction currently or slated to be."

The activity is fueling multifamily projects with more than 3,000 units under construction in Hollywood as of the beginning of this year, according to CoStar research.

Mariani has seen Hollywood change in the last 11 years, but he said he has never seen so much multifamily development.

"I think it’s pretty unprecedented," Mariani said. "Prior to 2000, I think there were about 1,500 residential units in our two BIDs. Right now, we’re over 5,000 units, and we have another 5,000 or so in the pipeline that are slated to be built. So we’ll have a total of over 10,000 units in Hollywood probably in the next five years."

There are six multifamily projects under construction in Hollywood and ten more announced with 16 total, according to Mariani.

Roughly 660 units are scheduled for delivery this year with another approximately 2,463 in 2019 for a total of 4,558 projected by 2022, according to CoStar data.

The current boom in Hollywood has a bit of history to thank.

City Council leaders over the years, from City Councilman Mike Woo in the 1980s and Eric Garcetti, when he represented the area, up to the current Councilman Mitch O'Farrell, have made a big difference when it comes to helping draw developers, according to Joan Ling, an urban planning lecturer at UCLA.

Redevelopment investment, including from the Community Redevelopment Agency before it was eliminated in 2012, was also a factor, Ling says.

"Hollywood is an extremely desirable area with easy access to the Valley and downtown L.A. by transit and by car," Ling said. "It benefited from redevelopment investment."

The area’s transformation to an entertainment hub in recent years has paid off.

Bob Champion, founder, CEO and managing partner of Champion Real Estate Company, plans to build a project, 6220 Yucca, which made headlines last year when he announced he would voluntarily make the units rent-controlled.

The question is why?

"The truth is I understand politics in L.A. and Hollywood, and there’s a growing concern about affordability," Champion said. "Rather than being reactive where approvals on projects are delayed, I would rather be proactive and demonstrate my willingness to work with the community and, in return, hopefully, not have as difficult an approval process.”

His aim is to have the project approved a year from now and then start construction soon after.

The site is within a half-mile of major transportation and close to the freeway. He said he also likes the "economic drivers" in Hollywood, including public transportation, new office buildings, jobs and the fact the Hollywood BID has worked with police to clean up the neighborhood.

An added bonus for all developers is Hollywood is heavily skewed toward renters. More than approximately 80% of locals rent, according to CoStar. That fact is supported by the median home price of nearly $850,000, making homeownership too expensive for most residents, according to CoStar data.

However, not all of the development is welcome.
Local residents and community groups opposing Millennium Hollywood, for example, a mixed-use, 492-unit condo project at 1720 North Vine St., hired land use attorney Robert Silverstein to fight the development.

It sparked controversy regarding the issue of whether the development would be built over an active earthquake fault.

“Activists are tired of development and really pushing back on that,” said Kitty Wallace, executive vice president at Colliers International.
However, she agreed the Hollywood market is healthy for multifamily.

“We’re not really seeing a softening of rents in that area either,” added Wallace, a multifamily expert.

AVA Hollywood is another project that is under construction. Located at 6677 Santa Monica Blvd., it will add 695 units to the market and is expected to be completed next year, according to CoStar data.
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