The Los Gatos-based company signed a lease for 171,000 square feet at the Burbank Empire Center at 2300 W. Empire Ave.
It’s the largest new office lease this year in L.A., according to CoStar Group Inc.
Netflix is initially taking 150,000 square feet and plans to expand by 21,000 square feet, CoStar reported. The building is owned by New York Life Insurance Co.
Netflix did not immediately respond to requests for comment.
This isn’t the company’s first major lease in Burbank. Last year, Netflix signed a lease at Burbank Studios. It also leases spaces at two buildings near the Burbank Empire Center, according to CoStar.
The streaming giant has also leased large blocks of space in Hollywood, totaling more than 1 million square feet. It has agreed to take more than 700,000 square feet of space in the Epic tower and Sunset Bronson Studios, properties owned by Brentwood-based Hudson Pacific Properties.
In addition, Netflix has signed a lease for 355,000 square feet at Academy on Vine, a property owned by Sawtelle-based Kilroy Realty Corp.
The company acquired the famous Egyptian Theatre on Hollywood Boulevard from American Cinematheque, a nonprofit, in May.
Burbank has long been an epicenter for entertainment and counts Nickelodeon, Walt Disney Co. and Warner Bros. among its residents.
Animation production company Titmouse Inc. leased a 95,000-square-foot space at 2835 N. Naomi St. earlier this year from Brentwood-based GPI Cos. Titmouse, known for shows like “Big Mouth,” has a deal with Netflix to produce animated series aimed at adults.
Bill Boyd, an executive vice president at Kidder Mathews and a Tri-Cities market expert, said the existing companies in the area provide Netflix with a lot of benefits.
“That geographic area provides not only the synergy but also the recruiting ability as those companies compete for talent. It’s much better to be in that neighborhood and in the same location so that the new hires or talent aren’t relocating,” Boyd said.
All the interest in Burbank has led to a hot market. In the second quarter, the vacancy rate in the city was 7% compared with 11.8% the previous year, according to data from Jones Lang LaSalle Inc.
The asking rate for Class A properties, meanwhile, was $3.67 a square foot. That could put the value of the Netflix lease at $7.5 million a year. And the Netflix lease could further benefit the area.
“It’s a very dramatic affirmation of that market, particularly for the airport area of Burbank,” Boyd said.
“This validation of Netflix of that location will help those landlords and owners in that area to get rents more consistent with what the media district has been getting,” Boyd said.
For reprint and licensing requests for this article, CLICK HERE.