New York Investor Buys Netflix-Leased Campus in Hollywood As Demand Grows for Production-Related Pro
Georgetown Co. Pays $93 Million for LA Office and Studio Space With Room for Additional Development
By Jack Witthaus CoStar News February 25, 2022 | 12:16 P.M.
An office and studio campus leased to streaming entertainment behemoth Netflix nearly doubled in value for a Southern California investment company, which sold the Hollywood property amid rising demand for Los Angeles real estate catering to the entertainment business.
Georgetown Co., a New York-based real estate investor, bought the 75,000-square-foot Hollywood Media Campus at 1350 N. Western Ave. for $93 million, or about $1,240 per square foot. The seller of the 3.5-acre site was Pasadena, California-based real estate investor Gemdale. Gemdale acquired the property for $51 million, or about $677 per square foot, in September 2015, according to CoStar data. The sale price was well above the $450-per-square-foot average for office space in the East Hollywood-Silver Lake office market and the $596-per-foot average in the adjacent Hollywood office market, according to CoStar data.
Representatives of Gemdale and Georgetown did not respond to requests for comment from CoStar News.
“The Hollywood Media Campus offered the ideal combination of stable income from existing tenancy coupled with the growth potential from the development of the adjacent parcel,” said Kevin Shannon, Newmark co-head of U.S. capital markets, who was involved in the deal. “The new ownership will have a variety of options for the site ranging from by-right development to pursuing a zoning change to increase density.”
Demand for streaming entertainment has skyrocketed since the building's last sale, particularly so during the pandemic. Soundstage space is 95% leased across L.A., according to CBRE, as major entertainment companies such as Apple, Disney, HBO, NBCUniversal and Paramount spent more than $8 billion to create original content in 2021, according to London media research firm Ampere Analysis. Ampere projects total global entertainment content spending, which includes streaming video on-demand platforms, to reach $230 billion in 2022, up from $220 billion in 2021.
Netflix, based in Los Gatos, California, accounted for 6% of all content creation spending in 2021, according to Ampere.
The Hollywood Media Campus, built in 1992, has room for future development on 1.7 acres, where roughly 108,000 square feet of space can be built. The property also is desirable due to its proximity to U.S. Route 101 and the Hollywood/Western Metro station.
Netflix has leased more than 2 million square feet of office and production space in Los Angeles, according to CoStar data. In January, the streaming giant paid $25 million for the 1-acre property at 1522 N. Van Ness Ave. where a Denny's once stood roughly 1 mile from Hollywood Media Campus.