In one of the largest office leases seen in Los Angeles over the last few years, the fast-growing E! Entertainment Television network will relocate its cramped Wilshire Boulevard headquarters--to the bigger building next door.
Defying recent data finding that the entertainment business is growing at a much slower pace than just a year ago, the lease transaction valued at more than $100 million will add about 100,000 square feet to E!'s headquarters and make room for expected growth, said Bill Keenan, chief financial officer.
The network known for "The Howard Stern Show," "Talk Soup," Joan Rivers' Academy Awards interviews and a bevy of celebrity gossip- and fashion-oriented programming will remain in the media-heavy Miracle Mile district east of Beverly Hills. The bulk of its more than 900 home-office employees will move from the 27-story tower at 5670 Wilshire Blvd. now bearing the E! logo to 5750 Wilshire Blvd., where E! will construct ground-floor studio and production facilities.
E!'s future headquarters--which will eventually encompass 260,000 square feet of floor space--is the terraced Wilshire Courtyard complex just across Masselin Street from E!'s current digs. E! already leases some offices at Wilshire Courtyard, but the bulk of the operation will move in phases late next year and in early 2000, said Keenan.
E!'s new landlord will move some of its current tenants around to accommodate the new "anchor" tenant joining Spelling Entertainment, Variety and others at Wilshire Courtyard--which is featured in the opening credits of Spelling's "Melrose Place" evening soap opera.
Revenue at E!, which is owned mostly by a Comcast/Disney venture (along with cable operators MediaOne and TeleCommunications), has grown at a 70% annual compounded rate since its June 1990 launch. "We've hired a couple hundred people just over the last year," Keenan said. He predicted revenues may hit $200 million next year.
E! claims about 54 million cable and direct-broadcast subscribers. The company and its partners also operate 24-hour branded channels in Latin America and Spain. On Oct. 1, E! launched the latest of its family of channels, a fashion-focused offering known simply as "style."
E! considered various headquarters options for more than a year before its real estate consultant, Brentwood-based Metrospace Corp., began discussions with Wilshire Courtyard's new owners and their agents at CB Richard Ellis. Earlier this year, an affiliate of New York-based investor Blackstone Group joined locally based real estate firm McCarthy Cook & Co. to purchase the 1-million-square-foot Wilshire Courtyard.
Metrospace brokers Jerry Porter and Doug Econn noted that the search team considered locations from Glendale to Hollywood and even a customized "build-to-suit" property at the Playa Vista planned community--future home of DreamWorks SKG studios.
Besides the proximity to the existing E! headquarters, Keenan noted that Wilshire Courtyard got the nod because of the lease economics, continued prominent logo display to the street and the ability to house E! offices primarily on two floors--compared with 15 next door.
"At any time, we typically have 100 people in elevators or waiting for elevators," he noted.