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Tuesday, May 17, 2022

L.A. Rising: Hollywood Real Estate Sees Slate of Mega Projects

Hollywood’s allure continues to grow. The iconic area no longer just appeals to aspiring actors and tourists but also has attracted large companies like Netflix. Developers are right behind them with plans to add soundstages and major mixed-use real estate projects.

KEY PROJECTS

Hollywood Center
Location: Hollywood and Vine
Description: The mixed-use project will have 903 residential units, including 770 market-rate units and 133 affordable units for seniors. The senior housing component is a partnership with Menorah Housing Foundation. Once completed, the project will also have nearly 386,000 square feet of creative office space and 27,000 square feet of restaurant and retail space.
Developer: MP Los Angeles
Architect: Handel Associates
Estimated Completion Date: NA

The Star
Location: Sunset Boulevard and Gower Street
Description: Once completed, the $500 million creative office campus will be a 22-story tower. It will have sky gardens, a cable rail, rooftop restaurant and event spaces.
Developers: Star, a family-owned limited liability company led by Chinese investor and real estate agent Maggie Gong Miracle
Architect: MAD Architects
Estimated Completion Date: 2026

Whisky Hotel
Location: 1717 Wilcox Ave.
Description: The hotel, which is under construction, will have 134 hotel rooms once completed. The whiskey-themed hotel will have minibars with whiskey and a whiskey fountain in the lobby.
Developer: Adolfo Suaya
Architects: Roschen Van Cleve Architects and Christoph Kapeller of CK-Architecture
Estimated Completion Date: 2022

Crossroads Hollywood
Location: 6671 Sunset Blvd.
Description: The $1 billion mega-development will incorporate the existing Crossroads of the World plaza and add nine new buildings, including a 308-room hotel, 950 apartment units and 190,000 square feet of commercial space. It will span 8 acres.
Developer: Harridge Development Group
Architects: Skidmore Owings & Merrill and Rios Inc.
Estimated Completion Date: 2025, with some stages opening sooner. The project has been the subject of numerous lawsuits that could cause delays.

HOLLYWOOD BY THE NUMBERS

OFFICE
(Hollywood-Wilshire Corridor, as of Q3)

Direct vacancy: 22.2%
Lease rate: $3.65 a square foot
Net absorption: -96,862 square feet
Gross leasing activity: 156,000 square feet
Source: CBRE Group Inc.

RETAIL (Hollywood-Silverlake, as of Q3)
Inventory: 629,544 square feet
Overall vacancy: 20,299 square feet
Vacancy rate: 3.2%
Net absorption: 1,830 square feet
Source: CBRE Group Inc.

MULTIFAMILY
12-month units delivered: 1,464
12-month absorption units: 2,720
Vacancy rate: 6.9%
12-month asking rent growth: 5.8%
Source: Colliers International Group Inc.

 

HOTELS
Under construction:
Nue Los Angeles,
Hyatt Unbound
64 rooms
Whisky Hotel
134 rooms
Tommie Hotel
212 rooms
Source: Atlas Hospitality Group

5 Questions With David Simon

One developer betting big on Hollywood is David Simon, founder and managing principal of West Hollywood-based Bardas Investment Group, which has submitted plans, along with partner Bain Capital, for a $450 million project to create Echelon Studios at a former Sears store.

The 5-acre site will have four 19,000-square-foot soundstages, a 15,000-square-foot flex stage and 93,000 square feet of bungalows in a creative village. The project will also include 370,000 square feet of creative office space.


Bardas Investment Group has more than 1 million square feet of projects in Hollywood.


Simon was previously an executive with Sawtelle-based Kilroy Realty Corp., where he was responsible for the company’s L.A. portfolio, including the Columbia Square media campus in Hollywood.
Simon spoke with the Business Journal about Echelon Studios and Hollywood.


Why are you interested in Hollywood?
Hollywood has been an area of interest to me for many years. I think it was 20, 25 years ago I did my first deal in Hollywood with retaining CNN and acquiring the CNN building. I always knew Hollywood is a special place in the city. It’s a worldwide brand.


How did Echelon Studios come to be?
It was really to focus on, especially in a post-Covid, world how do people — and the creative community in particular — want to use space. We found this site and started to think about the opportunity to create this urban studio environment. … Given the size of that particular site and given the geography of the site, we are able to create these (four) great soundstages with a sufficient base camp, with production support space, with bungalow space and really have all the elements of a studio lot on a 5-acre campus. … And the demand for content creation as we all know has really picked up incredibly, and to the extent we can participate in helping create these environments locally and keep people in Hollywood, that’s how that came about.

What makes something the right project for you?
Location is always the key in any kind of real estate investment and development for it to be successful. Clearly, costs are really going up now, construction costs, so you hope that prices will level off.

Echelon Studios will be at a former Sears store. Are you hoping to do more conversions and ground-up development at former retail sites?


The advantage of retail sites, and you’re seeing it all over, big malls converting … (is) they are usually very large retail sites, so you have a lot of land and a lot of ability to develop. They typically have a lot of parking area, which is important.


What is your outlook for the future of Hollywood?

 Over the last 20 years, the trajectory has been in the right direction, but there are always hiccups when a recession comes and there’s a slowdown, and there are homeless problems all over the city. But I do think as the entertainment business and content creation business is really home in Los Angeles … Hollywood has a great opportunity to capture its fair share because of the ecosystem that’s already in place, the studios that are already in place, and proximity to talent and good location within the city.

It’s always difficult to assemble the right parcels and assemble the land, and having worked in development and invested in Los Angeles and in this environment for the last 25-plus years, you are able to develop and (form) a lot of great relationships and are able to put together a lot of great projects. We’re bullish, and we think this space in real estate in the content and media tech area is really here for a while.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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