Don't shed many tears for Burbank.
Though NBC Studios may be packing up and leaving its location near "beautiful downtown Burbank" for nearby Universal City, Burbank has the hottest office market in the county and will likely weather the departure of one of its signature tenants.
Far from being the drab run-down locale that became the frequent butt of former "Tonight Show" host Johnny Carson's sarcastic jokes, the downtown and nearby office Media District has been transformed over the last 20 years.
Downtown Burbank is bustling with new stores, restaurants and expensive condominiums, while the Media District near the Ventura (134) Freeway has gleaming office towers filled with tenants. Media and entertainment companies have flocked to the area, anchored by Walt Disney Co., Warner Bros., and until 2011 NBC.
"That location of NBC in the Media District is ground zero for popularity and proximity," said Bill Boyd, executive vice president at Grubb & Ellis and managing director of the firm's Los Angeles metropolitan region. "It has historically been the most preferred location and only when space is not available (in the general area) have media tenants gone to the adjacent cities to satisfy their office requirements."
NBC Universal and its corporate parent, General Electric Co., announced last week that it will sell much of its Burbank studio campus and, starting in 2011, relocate its studio operations to a site just outside Universal City, home of Universal Studios and CityWalk.
The new high-definition studio will house NBC News' West Coast operations and the news staffs of KNBC, KVEA-Channel 52 as well as the syndicated show "Access Hollywood." The new studio will be part of NBC Universal's massive, $3 billion proposed expansion of the Universal Studios campus, which includes residential units, stores and additional office space.
John Tronson, a principal in the Hollywood office of Ramsey-Shilling Commercial Real Estate Services Inc., said that while the move was a shock to the brokerage community, the new gaping hole in the Burbank market will likely be filled easily.
Indeed, the Class A ("prime") office vacancy rate in the city during the third quarter was 3.4 percent, according to Grubb & Ellis Co. That's the lowest in all of L.A. County and less than half the vacancy rates in nearby Glendale or in Los Angeles. Moreover, the vacancy rate in the Media District is estimated at less than 3 percent by local brokers.
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