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How the Office Market is Heating Up in Hollywood

Epic Hollywood and Other Office Projects Ride the Wave
July 12, 2018
The under construction Epic Hollywood on Sunset Boulevard in Hollywood. Photo by Karen Jordan for the CoStar Group
The under construction Epic Hollywood on Sunset Boulevard in Hollywood. Photo by Karen Jordan for the CoStar Group
Epic Hollywood, West Los Angeles-based Hudson Pacific Properties' 298,400 square feet office project, is now taking shape along Sunset Boulevard.

The 13-story development, designed by Gensler, will include vertical stacks and terraced floors with electric charging stations, bike storage and expects to be LEED Gold status.

The under construction Class A office project, at 5901 Sunset Blvd., should be completed by 2020, according to James Hooks, principal at Cresa. It is being built on spec, so it is yet to be seen whether it might attract another media tenant to Hollywood similar to Netflix, which is in another Hudson Pacific project down the street at 5800 Sunset Blvd.

Netflix moving its Southern California offices from Beverly Hills to the Sunset Bronson Studios lot in Hollywood last year as Viacom takes up residence at Kilroy Realty Corporation’s Columbia Square, at 1575 North Gower, were both a coup, said Leron Gubler, longtime president of the Hollywood Chamber of Commerce.

Given that, the Epic Hollywood project, in particular, is playing an important role as the Hollywood office market heats up.

"It also helps to connect the office developments. You’ve got Netflix on the east side of Sunset on the Sunset and Bronson block," Gubler said. "So having the Epic building just a block to the west helps to fill in that area, and it’s a beautiful project they’ve got planned there that will really help to revitalize that Sunset Boulevard District."

All of the projects being built, among them the Romaine, a 60,508-square-foot development at 7007 Romaine St. from Mid-Wilshire-based CIM Group, Harlow at 1001 North Seward St., a 128,725-square-foot office project and the Academy at Vine, a mixed-use project with 335,000 square feet of office which recently broke ground, also show how far Hollywood has come in recent years.

"We’ve got more office construction underway in Hollywood than any place else in the county right now," Gubler said.
It’s all a big change from when Gubler first began his tenure at the Hollywood Chamber of Commerce in 1992.

At that time, everyone was leaving the area, he said.

"In the interim of the last 26 years, we’ve worked very hard to turn Hollywood around," said Gubler , who is retiring next year.

Michael Longo, vice president at CBRE, agreed, saying there is a lot drawing office developers to the area.

"It’s a combination of great night life, a lot of new housing, the Metro line and some of the best housing in the city with executive housing from the Hollywood Hills to Los Feliz down to Hancock Park," Longo said.

Hollywood also has the highest concentration of entertainment media companies, including Paramount Studios, Sunset-Gower Studios and Sunset-Las Palmas, according to Longo.

More than 1 million square feet of new offices have delivered in Hollywood since the beginning of 2015, equating to cumulative inventory growth in the submarket of nearly 11 percent over a three-year period, according to CoStar Market Analytics. Almost 940,000 square feet of additional development is now underway there.

The average price per square foot in Hollywood office trades has more than doubled since 2010 which is a testament to the strength of Hollywood, according to CoStar Market Analytics.

CBRE just put 900 Seward, a more than 40,000 square foot post-production facility leased to Deluxe Entertainment in the heart of the Hollywood Media District, on the market this week, Longo said.

It is surrounded by new construction, including 959 Hollywood across the street.

The 900 Seward building last sold for $19 million, or $471.29 per square foot, in 2015, according to CoStar data.

"It’s a very specialized facility you’d only find in Hollywood because of the entertainment companies that it services," Longo said.
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