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Saturday, Apr 13, 2024

Real Estate Quarterly: Entertainment Hub

If there is any city in Los Angeles able to challenge Burbank as the center of media and tech in the area, Culver City may soon take that crown.
In the past couple of years, Amazon.com Inc., Apple Inc., Warner Bros. Discovery’s HBO and TikTok have all planted flags in Culver City. Amazon Studios occupies Culver Studios, owned by Hackman Capital Partners, while HBO is based at Lowe’s Ivy Station mixed-use development.

“If you look at the greater Hayden Tract and (adjacent) downtown Culver City, you’re talking about 3.5 million square feet of office,” said Gabe Brown of Jones Lang LaSalle Inc. “That is not a lot of office space. It’s densely packed with some of the largest players in the world.”

As a result, other businesses want to be in Culver City.
“All these smaller companies want to be here to vibe with the media giants,” Brown said. “You’re creating a cross-pollination environment.”


Culver City has come a long way from its industrial roots.
“In the ’80s and early ’90s, it was not a desirable part of town,” Brown said. “Culver City for many years was predominantly an industrial area of Los Angeles. Sam Hayden industrialized the area with what was called the Hayden Tract.”

Frederick and Laurie Samitaur Smith had the most prominent impact on this part of town, according to Brown.
“For the past 20 plus years, my partner Mike Geller and I have represented them,” Brown said of Laurie and Frederick, the latter of whom has since passed away. “(The Smiths) had an experiment where they were going to take these industrial buildings and turn them into exciting architecture with architect Eric Owen Moss and turn it into a creative office epicenter. It started driving substantial tenants to this part of town.”

Brown said the couple’s vision brought tech companies to Culver City and sparked a renaissance. Now Culver City is home to media, technology and entertainment companies — anyone creating content.
“It’s a great location,” Brown said. “Right next to the 10 and the 405. Culver City is the most strategic part of the city in terms of getting around.”

Hayden Tract is comprised of 1.3 million square feet of industrial infrastructure; it also contains two Metro stops. The area is alive with activity: Smashbox Studios, Patrick Soon-Shiong’s Nant Studios, gaming companies, creative advertising agencies, and plus, a 50,000-square-foot Whole Foods on the way.

“There is a future in this part of town that is evident by these developers,” said Brown, who just closed a deal with an international creative ad agency. “When they came to open an office in L.A, they came to Culver City,” he said, referring to the agency.

The Conjunctive Points neighborhood is owned by Laurie Samitaur Smith, the largest private owner of creative office buildings in the Culver City area. Smith is currently developing a 180,000-square-foot, 15-story creative office tower with a penthouse, scheduled to be completed in September “We preleasing now,” Brown said.

Hackman Capital Partners’ Culver Studios.

Studio boom

Hackman Capital Partners purchased CBS Television City in the Fairfax District and CBS Studio Center in Studio City. However, its first investment in soundstages began in Culver City.

“We have had a meteoric rise in terms of our investment in studio space,” said Ryan Smith, executive vice president of asset management at Hackman Capital Partners. “We had not owned studio space prior to buying the property in 2014.”
The purchase of Culver Studios included 350,000 square feet on 14 acres — what was originally Thomas Ince’s studios, opened in 1918.

“It’s a historically significant site and we appreciated the challenges,” Smith said, as Hackman needed to “identify which stages are not historically sufficient and not efficient use.”
The company designated four soundstages and offices – roughly 200,000 square feet – to be taken down, and added 500,000 square feet of soundstages plus 80,000 square feet of office space for a total of 750,000 square feet.

“What we didn’t know is that a couple of large content makers eyed Culver City for their headquarters and would take all of the studio space,” Smith said of Hackman’s $600 million redevelopment of Culver Studios.
In fact, Amazon not only committed to Hackman’s Culver Studios as its new headquarters, but did so early in the process.

“We were able to sign the lease with Amazon prior to the entitlement process, which is pretty much unheard of,” Smith said.
He added that Culver City is an attractive location for content creators because it’s home to two massive studios and has two Metro stops.

The Culver Studios is not Hackman Capital’s only investment in Culver City. There is also the Culver Steps, a mixed-use space anchored by an Erewhon Market. In addition, the company sold a complex it had developed that is now occupied by Apple’s Southern California headquarters.

Meanwhile, Hackman’s partnership with Amazon has gone smoothly as the company returns to creating content for its streaming service.
“The one thing Covid did was slow down production while everyone sat around and consumed content,” Smith said. “So there was an appetite for everyone to get back to work.”

New York-based Square Mile Capital Management partners with Hackman Capital on its studio acquisitions.


Other projects

Not far from Culver Studios stands another recently completed enterprise. Tom Wulf, executive vice president of Lowe, which — with AECOM Canyon Partners as co-general partner and financial partner Rockwood Capital — developed the Ivy Station, a mixed-use site with office, apartments, hotel, restaurants and retail at the intersection of Venice, Washington and National boulevards.

“Our involvement dates back to 2011,” Wulf said. “We had been tracking the opportunity that arose from the Expo Line expansion from downtown to Santa Monica.”
In early 2012, just as Gov. Jerry Brown began shutting down redevelopment agencies, Culver City’s agency put out a request for proposal to develop a five-acre parcel, and Lowe was chosen.

Then came a two-year wait.
“We had a hiatus,” Wulf said. “Right as redevelopment was shut down, it required every redevelopment agency to submit those to the state for review. They had to reevaluate and approve the projects.”

The project was approved, giving Lowe the green light to move forward.
From 2014 to 2016, the project went through approvals and community meetings.
“Even though Culver City acquired the property, part of the property is in the city of Los Angeles, so we had to deal with agencies from both,” Wulf said. “We also went through the approval process with Metro.”

Lowe ultimately procured those approvals in 2016, secured financing in 2017, and construction unspooled from 2017 through 2021. The construction was not without challenges, however, as it took place in the midst of Covid amid labor shortages.
The resulting Ivy Station has brought 240,000 square feet of office leased to Warner Bros.

Discovery that is home of HBO’s West Coast headquarters; 200 market-rate apartment units; the Shay, a 148-key hotel with rooftop bar and pool managed through Hyatt; and 46,000 square feet of retail and restaurant space that is still being built out to include Equator, Carbon Health, Solid Core, Milk & Honey, Healthy Spot and L.A. Ale Works.
The complex comes with a 1,500-vehicle underground garage at the Expo station at Venice, National and Washington boulevards.

In 1917, Harry Culver created Culver City, which became Hollywood’s backlot, home to MGM Studios and Hal Roach Studios. Today, just over a century later, Sony Pictures stands in the lot in which MGM once stood, and the major streaming companies in the complex include Amazon, Apple and HBO.
“It’s come, 100 years later, full circle in the digital age,” Wulf said.

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