Biggest Hollywood Lease in a Decade: Viacom Consolidates in Hollywood
LA Times 11/19/14: http://www.latimes.com/business/realestate/la-fi-columbia-square-viacom-20141120-story.html
The campus that was once the legendary Hollywood headquarters for CBS will become home to a new generation of popular broadcasters.
Cable television networks MTV, Comedy Central, BET and Spike TV will consolidate in a new building at Columbia Square, a $420-million office, residential and retail complex under construction at Sunset Boulevard and Gower Street.
The networks' owner, Viacom Inc., agreed to rent 180,000 square feet of space, Los Angeles developer Kilroy Realty Corp. said.
The lease, which will see Viacom fill most of a six-story building, is the largest signed in Hollywood in the last decade, said David Simon, executive vice president of Kilroy. The deal validates Kilroy's strategy to turn the former CBS site into a live-work campus aimed at attracting entertainment workers, he said.
"The decision by one of the giants in the entertainment industry to relocate some of its most popular networks from Santa Monica and Burbank and consolidate them at Columbia Square further demonstrates that office environments matter," Simon said. "This is a bellwether event for both Columbia Square and the ongoing rebirth of Hollywood."
The office building is the larger of two, with a combined total of 350,000 square feet, being built at Columbia Square. Both are slated for completion in early 2016, with Viacom expected to take occupancy in phases starting in the middle of that year. The lease is set to last 12 years.
It is the second significant lease to be signed at Columbia Square since Kilroy broke ground on the project in February. NeueHouse, a New York operator of avant-garde communal office space, agreed in July to lease 93,000 square feet in the original CBS office and studio complex completed in 1938.
At the time, it was America's biggest and most technologically advanced broadcast facility. During the 1940s and 1950s, audiences there watched live productions of radio shows featuring Jack Benny, Orson Welles, the comedy duo of George Burns and Gracie Allen, and many others.
CBS radio station KNX also operated out of the Art Deco-style studios and CBS television programs originated there until operations wound down in the mid-2000s. NeueHouse is expected to take occupancy in spring 2015.
Inducing Viacom to relocate its operations from other neighborhoods is a sign that Hollywood is reaching critical mass, said real estate broker Carl Muhlstein of JLL, who represented Kilroy.
"Tenants are willing to travel across markets for the right space, which is very unusual in L.A.," he said. "And tenants are paying attention to branding opportunities and what statement their real estate makes."
Viacom is expected to have large graphics on the building that will be visible from long distances, Muhlstein said. "There hasn't been a big-media tenant of this magnitude arriving in Hollywood since the Capitol Records tower" was built in the mid-1950s.
Columbia Square will include a 20-story residential tower with 200 apartments for rent. Its interior will sport the vision of designer Kelly Wearstler, known for her modern interpretations of classic Hollywood glamour. Half of the units will be furnished to appeal to guests who might otherwise stay in a hotel for weeks or months at a time.
CBS and Viacom were part of the same company until 2006, when billionaire Sumner Redstone divided his empire into two separate publicly traded companies — Viacom and CBS Corp. Redstone, 91, who lives in Beverly Hills, is the controlling shareholder of both media conglomerates.
Viacom also owns the Paramount Pictures movie studio, based about a mile away on Melrose Avenue. Columbia Square's proximity to Paramount was a factor in the decision, said a person close to Viacom, who requested anonymity because he was not authorized to talk about the deal.
"Kilroy's successful re-imagining of Columbia Square … is a sterling example of the surging investment happening in Hollywood and across L.A.," Los Angeles Mayor Eric Garcetti said in a statement. "Companies like Kilroy and Viacom are right at home here in our city of dreamers and doers."
*Shared by Jeff Vertun