In one of the largest lease deals in Burbank this year, a division of Hollywood postproduction house Deluxe Entertainment Services Group Inc. will expand into an entire 130,000-square-foot building at Burbank Empire Center.
The company’s Blu-ray and DVD division, Deluxe Digital Studios, signed a 14-year deal at 2400 W. Empire Ave. with Alaska Permanent Fund Corp. and CBRE Global Investors, the partnership that owns the building. Deluxe Digital had been occupying about 78,000 square feet at the four-story property and signed to occupy the remaining 52,000 square feet. Financial details were not disclosed, but industry sources estimate the value of the lease at $60 million.
The company is the latest entertainment firm to take space in the three-building complex, bringing it to nearly 100 percent occupancy. Playboy Plus, the online unit of Chicago’s Playboy Enterprises Inc., and Modern VideoFilm Inc. also recently signed leases in other buildings.
Deluxe Digital already has building-top signage. It has begun renovations to its new space, formerly occupied by State Compensation Insurance Fund, and plans to begin moving in this summer.
Mark Sullivan, executive vice president of brokerage Studley Inc.’s downtown L.A. office, who represented Deluxe, said the company will consolidate as it leaves space acquired after purchasing Ascent Media Corp. in 2010.
“It was the first time Deluxe had the opportunity to control the entire asset,” he said. “The timing of the transaction was such that we were able to accommodate Deluxe’s expansion needs while taking advantage of current market economics. … It’s a great time to make a long-term commitment in that market.”
Deluxe Entertainment, a subsidiary of New York’s MacAndrews & Forbes Holdings Inc., has aggressively been expanding and diversifying its business worldwide over the past several years. The company, which offers services such as DVD pressing and digital mastering, has launched a mobile initiative.
Deluxe was also represented by Andrew Lustgarten, Studley’s corporate managing director in Los Angeles. Burbank Empire Center was represented by Paul Stockwell and Nico Vilgiate, senior vice presidents at West L.A.’s CBRE Group Inc.
The former American Shower Building in Santa Monica where several television shows have been filmed traded hands for $18 million last week.
Watt Cos. of Santa Monica bought the building at 3401 Exposition Blvd. in an off-market deal from private Santa Monica investment partnership Centinela Studios LP, which has owned the building for years.
The 54,000-square-foot building has been used as production space for years. The late Aaron Spelling’s production company, Spelling Entertainment Group Inc., used it for some of its shows, including “Beverly Hills 90210.” Most recently, the building has been used as a set for filming of Fox show “House.”
Patrick Ayau, managing principal at Lee & Associates/West L.A. who represented both sides in the deal, said that the former owner was dissolving the partnership and was ready to cash out.
Watt intends to allow filming to continue but is looking to redevelop the interior into creative office space.
Optimism is growing in the Los Angeles County residential market, according to a survey by Seattle brokerage Redfin.
About 49 percent of the 140 prospective or active county homebuyers recently surveyed by the brokerage said they believed that homes prices will rise by the end of the year. That’s nearly double the percentage of respondents who told the brokerage in the first quarter that they believed prices were heading up.
The second quarter has brought some good news as home sale indicators have improved so far in the period. In April, county homes sold for a median of $330,000, up 3 percent over the previous month. Back in January, median prices fell 5 percent month over month to $305,000.
Kameron Eliassian, a Redfin broker in Los Angeles, said that the optimism doesn’t surprise him. He is seeing homes in prime neighborhoods such as West Los Angeles selling for well-above asking rates.
“The amount of activity on each home that’s on the market has just been incredible,” Eliassian said. “
Staff reporter Jacquelyn Ryan can be reached at email@example.com or (323) 549-5225, ext. 228.
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