Company 3 Ups Ante With Expansion From Space First Taken in April 2021
By Jack Witthaus CoStar News March 25, 2022 | 1:40 P.M.
A post-production company that has worked on high-profile movies, Super Bowl commercials, and TV shows including Disney's "The Mandalorian" agreed to lease more space in Hollywood in one of the biggest office deals of the year for greater Los Angeles.
Company 3 has leased about 60,000 square feet at 1001 N. Seward St., adding to the roughly 70,000 square feet it took in the newly built space in April 2021, according to two people with direct knowledge of the deal. With the latest deal, Company 3 has leased the entire four-story, 130,000-square-foot building developed by Los Angeles-based real estate investment trust Hudson Pacific Properties. Hudson Pacific and Company 3 declined to comment to CoStar News.
Hudson Pacific said in a fourth-quarter earnings call on Feb. 18 that the company had completed the four-story, 1001 N. Seward project called Harlow. Arthur Suazo, executive vice president of leasing, said in the call that the company was in discussions with multiple multifloor users for the building, part of Hudson Pacific's Sunset Las Palmas Studios complex, which has historic soundstages and production offices.
Hollywood, synonymous with the entertainment industry, is undergoing a rebirth from its blighted recent past as production ramps up in response to demand for more TV and movies with the accelerating popularity of streaming services. Netflix, Paramount, Viacom and others have major presences in the area, and developers are racing to build more soundstage and production space near these entertainment giants. Hollywood Boulevard Poised for Reboot as Production Ramps Up, Tourists Begin To Return Soundstage space is roughly 95% leased across L.A., according to real estate services company CBRE. Meanwhile, entertainment companies from Apple to NBCUniversal poured billions of dollars into creating original content in 2021. Total global entertainment spending, which includes streaming video-on-demand platforms, expected to reach $230 billion in 2022, according to London media research firm Ampere Analysis.
These production-related properties have been selling for big price tags, too. New York real estate investor Georgetown Co. bought the roughly 75,500-square-foot Hollywood Media Campus at 1350 N. Western Ave. for $93 million, or about $1,240 per square foot, in February. The Netflix-leased property previously sold for $51 million in September 2015. Also in February, Houston real estate investor Hines spent more than $42 million on the land beneath the roughly 30,000-square-foot, golf ball-like Burbank Media Studios Phase VII and VIII in its foray into buying production space.
Harlow itself was part of a nearly $1.7 billion deal in summer 2020 when New York real estate behemoth Blackstone bought a 49% stake in Hudson Pacific's Hollywood media portfolio. The building is named after early cinema star Jean Harlow.
The Hollywood office market has an average vacancy rate of 17.5%, higher than the greater Los Angeles average of 13.9%, according to CoStar data. The market's average rent is $54.70 per square foot, far higher than the greater L.A. average of $41.53 per square foot.