People Want to Be in Hollywood
LOS ANGELES—Move over Downtown. Hollywood is experiencing its own renaissance and it is attracting employers and residents from all over the city, Lee & Associates Robert Leveen talks to GlobeSt.com about the current state of the investment market.
LOS ANGELES—The narrative about the Downtown Los Angeles renaissance is strong, but it isn’t the only L.A. submarket experiencing a transformation. Hollywood is experiencing its own renaissance, and it is attracting huge employers and residents. As a result, development and redevelopment projects are up, vacancies are down and rents are on the rise. Robert Leveen, a principal at Lee & Associates and the president of the investment services group, talks to GlobeSt.com exclusively about the Hollywood market, where he is a local expert and has been transacting deals for years.
“Hollywood is a little bit different from Downtown Los Angeles,” Leveen tells GlobeSt.com. “It is the entertainment capital of the world and it is a really big tourist destination, and there is a lot of revenue to be captured just from the lot of people who are visiting. That really is a better transformation. People want to be there, and it is easier to get around there than in Downtown Los Angeles. The metro line gets you to Downtown L.A., but it also gets you to the valley.”
The market has been known for its major creative office developments, most notably the Columbia Square project by Kilroy Realty and the ICON at Sunset Bronson Studiosproject by Hudson Pacific Properties, both of which have signed major leases with media companies. As a result, multifamily developers are reimaging old buildings into class-A apartments for employees who want to live near their office. “There are a lot of people moving to Hollywood,” says Leveen. “People want to drive less and be closer to where they are working.”
He notes the new AvalonBay acquisition of a 5.8-acre land parcel in Hollywood, which sold for $99 million and will be converted into a 695-unit mixed-use facility. “Sites that size are very hard to come by, and it is the perfect example of the trend in that market. Ultimately, that is going to transform that location dramatically,” says Leveen. Other notable projects include the Frank Gehry-designed mixed-use property on the Sunset Strip from Townscape Partners and the Wilshire Royale redevelopment project. “There is a desire to capital to flow to areas that are new and exciting,” adds Leveen. “We have seen several things to happen in Hollywood over the years, and now with the economy turned around, Hollywood’s fundamentals are trending up. It is also a younger place, and people see it as a global brand. It is a destination.
Just like the renaissance in DTLA, the Hollywood renaissance will take years and span economic cycles, but Leveen thinks that any investment in this market now is a good one, saying, “Over the next 15 to 30 years, these are going to turn out to be very profitable developments.”