At one blow, Kilroy Realty Corp. has preleased the entire office component of Academy on Vine, its mixed-use project in Hollywood, Calif. Appropriately enough, Netflix is the tenant for all 355,000 square feet or so under a long-term lease.
The development’s three-building office component is currently underway, and the company plans to start construction on a 20-story, 193-unit residential building later this year. The Netflix lease is expected to begin in phases as the office component is completed, starting in mid-2020. The deal comes about a month after Netflix leased 328,000 square feet of office space at EPIC, Hudson Pacific Properties Inc.’s 13-story tower under construction nearby at 5901 Sunset Blvd.
Academy on Vine sits on a 3.5-acre, full-city-block site bounded by Vine Street, De Longpre Avenue, Ivar Avenue and Homewood Avenue, barely more than a block off Sunset Boulevard. At final completion, the development will include 13,000 square feet of food-and-beverage retail and 16,500 of studio and production space on two floors, as well as large public gathering areas featuring public art.
The project, designed to meet LEED Gold standards, has had a substantial gestation. Kilroy unveiled plans for a “creative media mixed-use office campus” back in June 2014, having some months earlier bought the site from the Academy of Motion Picture Arts and Sciences.
Creative tenants looking for space
The Class A office market in Hollywood is quite small, with an inventory of just 3.8 million square feet, according to a third-quarter report from Savills Studley Research. Its current vacancy rate of 18.3 percent is up from 18.7 percent a year ago. Asking Class A rents average $60.83 per square foot, which is up 3.5 percent year-over-year, also per the same report.
“Creative sector tenants have largely steered clear of space in Downtown Los Angeles’ traditional building stock, preferring the Westside or even the converted warehouses in the Arts District or South Bay,” the report explains.
In the second quarter, for example, Spotify leased 110,000 square feet at the At Mateo Complex (555 Mateo St.), moving its regional headquarters from 9200 Sunset Blvd. in West Hollywood. Since then, online coupon innovator Honey has leased 130,000 square feet at a former Coca-Cola plant in the Arts District, Savills Studley reports.
Image courtesy of Kilroy Realty