Hayden Tract ‘Ground Zero’ for Creative Office
GlobeSt sat me down for an interview on what's driving the Culver City creative office market and the variety of creative tenants throughout the entertainment and technology industries. Check it out!
CULVER CITY, CA—Entertainment and tech companies are flocking to the Culver City market to take advantage of the unique adaptive reuse creative office spaces and the central location. This high demand is creating a limited supply in the market and leading to high competition for these spaces. As a result, rents have been rising steadily over the past year, now up to $3.75 per square foot from $3 per square foot this time last year. Jeff Vertun, an associate at Avison Young and an expert on the Culver City submarket, recently inked a 7,000-square-foot, $1.5-million lease deal at Blackwelder, an adaptive reuse creative office campus. That is only the tip of the iceberg—the Culver City submarket has seen some of the biggesttransactions in recent history. To find out what is driving demand in the market and what tenants are looking for, we sat Vertun down for an exclusive interview. Here, he tells all about the Culver City market.
GlobeSt.com: What is driving entertainment tenants to the Culver City market?
Jeff Vertun: Culver City has long been a mainstay for the entertainment industry. In the 1920s Sony Studios and Culver Studios were built and have been anchors in the community ever since. Today, Culver City continues to attract and retain entertainment companies not only because of its deep industry roots, but for its central location; availability of unique creative space; and synergistic clustering of entertainment businesses.
Location: Being situated in the center of L.A. is key to working efficiently with the studios and ad agencies scattered from Playa Vista to Santa Monica to Hollywood to Burbank.
Creative Space: Entertainment companies thrive in highly creative office space to support their culture, while using their space as a tool for attracting business and talent. Culver City has already developed an incredible infrastructure of unique creative office options, while new industrial conversions and developments are in various stages as well.
Clustering: An ample and diverse mix of entertainment-related companies benefit from the community’s creative energy and culture as well as synergy between products and services lending well to cross-over business.
GlobeSt.com: What are entertainment tenants looking for in a space?
Vertun: In this highly competitive industry—both for business and talent—having the right space makes all the difference. Entertainment companies have been flocking to converted industrial buildings where they can enjoy features such as exposed brick, open ceilings, polished concrete floors, and stand-alone buildings. These companies not only demand space that portrays their identity, but it is also crucial for optimal functionality to be achieved. They typically like large open areas for employees to collaborate, with undedicated breakout rooms for occasional privacy. The Hayden Tract, a former industrial zone, is ground zero for this, with the Jefferson Corridor improving as well.
GlobeSt.com: Clearly rents in the area have increased significantly over the past year. Would you say that price is the biggest challenge in finding and securing a site? What are some of the other challenges?
Vertun: Culver City rents have certainly been on the rise and are showing no signs of slowing. However, rents in peripheral markets like Santa Monica, Playa Vista and Hollywood have all continued to rise as well, so Culver can still be a relative value play. The biggest issue in securing great space is the competition for it; demand is completely outpacing supply. The key is to work with an advisor who knows the inside info on the market who can source off-market opportunities. It also helps to have relationships with the landlords and experience in order to fully understand how to best negotiate to beat out other tenants.
GlobeSt.com: What is your forecast for the Culver City market over the next 12 months, and do you think the area will continue to see entertainment companies as a main driver of the office sector?
Vertun: The Culver City market will continue to improve over the next 12 months as we’re seeing creative companies continue to grow, hire and secure more office space. Entertainment companies in particular know Culver needs to be on their radar—they want to be near their peers—and that will continue to be a major driver. There are also new developments that will make the market even hotter. The Platform is a significant development near the Hayden Tract that is coming online later this year. This project will provide much needed retail, as well as additional creative office and parking options. Also, the Expo Line will soon be completed that goes all the way to Santa Monica, opening up convenient access to Culver City. Finally, there are several multifamily developments coming online soon, a welcome sight to employees who want to work close to home.