Hudson Pacific Nabs $200M Hollywood Studio
- May 04, 2017
Hudson Pacific Properties Inc.’s position as the largest independent owner-operator of sound stages in the U.S. just got stronger. The company recently completed the $200 million acquisition of Hollywood Center Studios, a 369,000-square-foot media and entertainment campus, from Studio Management Services Inc.
Hudson, which relied on proceeds from the sale of an office redevelopment at 3402 Pico Blvd. in Santa Monica to partially finance the acquisition, kicked off its ownership of the studio with a name change: the property is now known as Sunset Las Palmas Studios. Sited at 1040 N. Las Palmas Ave., the studio first opened the doors of its stages and bungalows in 1919. Today, the property encompasses 13 stages, as well as production offices and support space—and room for growth in the form of 15 developable acres. Hudson Pacific has plans for those acres.
“Sunset Las Palmas Studios is another historic asset in Hollywood that strengthens Hudson Pacific’s ability to support entertainment companies and meet the growing global demand for content,” Bill Humphrey, general manager with Hudson Pacific Properties, said in a prepared statement. “As we have done at Sunset Bronson and Sunset Gower, we plan to invest in Sunset Las Palmas to create a vibrant place where creativity, technology and digital media connect.” At the Sunset Bronson campus, acquired in 2008, Hudson Pacific developed the 315,000-square-foot Icon high-tech office building and the 92,000-square-foot CUE creative office destination, for which Netflix recently signed a lease to occupy in its entirety. And just a stone’s away at Sunset Gower, snapped up in 2007, the company erected a 115,000-square-foot build-to-suit office and motion picture technical production facility on behalf of post-production and special effects giant Technicolor.
It appears office product at Sunset Las Palmas, which can accommodate an estimated 575,000 square feet of development, would not only fit the pattern of Hudson Pacific’s studio properties, it would dovetail with a trend in the market. “I think right now what you’re finding is the office tenants are secondary to the stage tenants. They want access to the stages so they need to lease specific office space in and around the studios,” Victor Coleman, CEO of Hudson Pacific Properties, noted at the Citi 2017 Global Property CEO Conference in March. “So, it’s developed sort of a process by which these tenants are looking at coming into the marketplace and saying, ‘If I get office close to the stage space, we can lease both out.’ And we’re seeing that.”
Now that Sunset Las Palmas has joined Sunset Bronson and Sunset Gower, Hudson Pacific’s studio collection totals 1.2 million square feet spanning 41 acres in the heart of Hollywood. The company’s entire portfolio of office and media and entertainment properties, sited in California and the Pacific Northwest, totals 17 million square feet. As for further expansion in the studio sector, however, Hudson Pacific may have to wait another 10 years before its next purchase. “There’s a finite number of those opportunities that exist in LA. We’re not going to look in tertiary markets. If we were to expand the business, it’d be here. So there’s just limited opportunities to begin with,” Coleman said during Hudson Pacific’s fourth quarter 2016 earnings conference call on February 17.
Image courtesy of Hudson Pacific Properties