Netflix, Amazon fuel L.A. office demand as streaming flourishes
“HOUSE room.
Netflix, the streaming service that’s home to the political drama, last month leased an entire five- storey office building in Hollywood, less than three months after signing a decadelong deal for adjacent stages and production offices, bringing its total space in the Sunset Bronson Studios complex to more than 500,000 square feet (46,500 square metres) – roughly the size of five Wal-Mart stores.
The surge in online television viewing is spurring a wave of big real estate deals, as companies such as Netflix, Amazon.com and Google snap up space to cope with increased production demands.
The amount of office space the entertainment industry occupies in Los Angeles County has climbed to the most this decade, with media tenants in 25.5 million square feet, up 2.99 million square feet from five years earlier, according to brokerage CBRE Group Inc. of Cards” needs more
The space the streaming companies lease has evolved from the small offices of a few years ago to the giant production facilities typically associated with traditional Hollywood studios.
“The sort of boom around those marketplaces has been specific to the digital media and the entertainment world converging with the technology world,” said Victor Coleman, chief executive officer of Los Angeles-based Hudson Pacific Properties Inc., Netflix’s landlord at Sunset Bronson Studios.
The surge in leasing by entertainment companies reaches from downtown Los Angeles and Hollywood to Playa Vista, once a stretch of marshland between Los Angeles International Airport and Venice that’s become known as “Silicon Beach” because of an influx of media companies and digital startups.
Ent er tainment - indus t ry growth has helped an office market hurt by a years-long exodus of traditional users of corporate space, including hotel operator Hilton Worldwide Holdings Inc. and defence contractor Northrop Grumman Corp., both of which moved to Virginia.
Like Netflix, BuzzFeed Motion Pictures set up offices in Hollywood, while Amazon Studios is in Santa Monica and producers of original shows for Hulu’s service have used space at Culver City’s historic Culver Studios, where classics such as “Gone With the Wind” and “Citizen Kane” were filmed.
The sort of boom around those marketplaces has been specific to the digital media and the entertainment world converging with the technology world. Victor Coleman, chief executive officer of Los Angeles-based Hudson Pacific Properties Inc.
Netflix’s expanded Southern California facilities will be spread across multiple buildings at Sunset Bronson Studios, former home of Warner Bros. Studios, where “The Jazz Singer,” the movie industry’s first “talkie,” was filmed in 1927.
“What’s going on in L. A. now is very similar to what we saw many years ago, when the cable companies were growing rapidly,” said Jeff Pion, a vice chairman at Los Angeles-based CBRE. Rising demand for digital content, and the additional production that comes with it, mirrors the era when cable subscriptions climbed and new TV channels brought viewers more options, he said.
Hollywood isn’t alone in offering historic facilities to new-media companies.
Playa Vista – where companies including Alphabet Inc.’s Google, Facebook Inc. and Yahoo! Inc. now have space – is on land that once was an airstrip for pilot and movie producer Howard Hughes, an allure not lost on its current tenants.
“Everyone wants to work where Howard Hughes was,” said Alison Girard, Brookfield Residential’s director of marketing for Playa Vista.
“They want to come to a place with a story.” — WP-Bloomberg