"Hooray for Hollywood."
That's the song some commercial real estate brokers and developers are singing these days.
Two years ago, law firms, accounting offices and banks seemed to be filling almost endless blocks of new office space. The trend has been slowing--along with the economy--and many in the real estate business find themselves saddled with too much supply and not enough demand.
For the Record
Los Angeles Times Sunday December 23, 1990 Home Edition Real Estate Part K Page 2 Column 1 Real Estate Desk 1 inches; 17 words Type of Material: Correction
Studio expansion--The name of Barbara Cline, a Columbia Pictures executive pictured on K1 last week, was misspelled.
But it's a different story for the entertainment industry, which, stronger than ever, is driving some of the biggest development and lease deals in Los Angeles this year.
Almost every movie studio in town is planning an expansion, and many smaller production, management, consulting and distribution companies are in the market to lease or buy sizable chunks of commercial space.
At entertainment enclaves such as Universal City, Maple Plaza in Beverly Hills and selected buildings in Burbank's Media District, for example, there's virtually no space available, and landlords have waiting lists.
"The entertainment industry is one sector of the economy that hasn't suffered a downturn," said Robert Waller, a broker at Coldwell Banker Commercial Real Estate, Century City.
Longtime office tenants in Hollywood want to lease space all over town, Waller said, and many companies are shopping for small industrial facilities that can be bought at a favorable price in today's market.
Helping fuel these relocations is an undersupply of quality space in Hollywood, said Les Small, president of Entertainment Realty Corp. in Century City. "Lack of redevelopment in Hollywood has forced entertainment firms to go elsewhere," he said.
It's been almost 20 years since the construction of any major new office buildings in Hollywood. With many entertainment companies acutely in need of elbow room, Small said, "we can't find good-quality space in Hollywood at any price."
Here are some of the many real estate ventures of the entertainment industry:
--The Walt Disney Co. has been so active in development over the last five years that some critics have assailed its projects as symbolic of a "Disneyization" of architecture.
In Burbank, the company recently completed a 320,000-square-foot headquarters building complete with 19-foot-high dwarfs holding up the roof. Now the entertainment giant hopes to add another 1.15 million square feet of space on its 44-acre lot.
Disney wants quick approval of its new development plan by Burbank city officials. The company hopes to avoid any building constraints that could be imposed with the passage of Measure 2--a growth-limiting initiative set to appear on Burbank's February ballot.
Office space continues to be in short supply for Disney and its various units.
The company recently signed a lease with CMS Development to occupy a 115,000-square-foot building under construction at Olive Avenue and Buena Vista Street in Burbank. The new Carnation Building in Glendale opened its doors in November 94% preleased--thanks in part to a 98,000-square-foot lease by Walt Disney Imagineering.
All told, Disney has leased, subleased or preleased more than 500,000 square feet of commercial space in the last 12 months, reported Julien J. Studley Inc.
Finally, both Anaheim and Long Beach are in the running for yet another theme park. Port Disney, a $2-billion, marine-inspired creation on 350 acres in Long Beach, could include five new hotels, restaurants, various tourist attractions and a marina.
--NBC and Cushman Investment & Development Corp. are planning the 790,000-square-foot NBC Plaza office complex in Burbank. Cushman previously developed the nearby Disney Channel Building.
--Columbia Pictures Entertainment Inc. and its parent, Sony, are proposing a 15-year building plan in Culver City.
Columbia wants to expand the 1.53 million square feet of commercial space on its 44.7-acre lot along Washington Boulevard to about 2.5 million square feet by 2005.
The Culver City Planning Commission and Redevelopment Agency are considering whether to approve the project--which would include twin nine-story office buildings, small landscaped parks, a 19th-Century Town Square and new sound stages.
And Columbia is swapping space it now occupies on the Warner Bros. lot in Burbank with Lorimar Television, which, in turn, is leaving the Columbia lot in Culver City and is relocating to the Warner lot.
Meanwhile, Tri-Star Inc. will fill some of the space left by Lorimar at the Columbia lot.
If all this isn't confusing enough, Columbia has plenty of other offices scattered throughout Los Angeles.
The company occupies big chunks of space at Sunset-Gower Studios in Hollywood and in Studio Plaza at 3400 Riverside Drive in Burbank, just across the street from Warner Bros. That building, which will serve as corporate headquarters for Columbia, is owned by Columbia's former owner, the Coca-Cola Co.
Just a few blocks away, Columbia is filling 45,000 square feet of space at MCA's One Lakeside Plaza in Universal City. The recently signed lease is valued at about $7.4 million.