Goldman Sachs JV Acquires Hollywood Office Campus For US$186m
USA – An office campus within Los Angeles’ Hollywood Media District has been picked up by Goldman Sachs and Lincoln Property Company for roughly US$186 million, reported the Commercial Observer at around 1:30am on Thursday (31 December, SGT).
The acquisition of the Hollywood 959 office campus, which was completed by J.h. Snyder Co. in 2016, was verified by 3 sources privy to the deal. It was also uncovered from an analytics firm’s data report.
The commercial property includes 2 office buildings at 959 Seward Street with a combined area of around 244,329 sq ft.
Lessees include Bold Films, Formosa Group and Serendipity Labs. The Los Angeles Times also reported that mobile streaming platform Quibi inked a 10-year lease for 49,000 sq ft in 2018. However, an insider shared that it had vacated the 3rd and 4th floor this year after it ceased operations in October 2020.
The Los Angeles Business Journal also reported that Deluxe Entertainment is subletting almost 47,000 sq ft of space there. Based on JLL’s statistics, the amount of available sublease office space in Los Angeles continued to rise during the 4th quarter. It increased by 16.5 percent compared to Q3 and 65 percent since the start of the health crisis.
Moreover, a 4th source who is close to the property’s owners revealed that they attempted to recapitalize the asset in 2019 but failed to do so.
Based on previous marketing materials for the office campus, its monthly asking rent is around US$5.35 psf. Data from Cushman & Wakefield (C&W) show that the average asking rent of Grade A office space in the Greater Los Angeles area is around US$3.82 psf, while that in Hollywood hovers at US$5 psf.
Situated south of Santa Monica Boulevard, the Hollywood 959 office campus is just opposite of Hudson Pacific Properties’ Sunset Las Palmas Studios. It’s also close to the Television Center, The Lot Studios, and Paramount Studios, in addition to the office blocks of other top media and tech firms.
The blockbuster sale adds to major office transactions in Los Angeles. Despite the COVID-19 pandemic’s severe effect on various kinds of commercial properties, Hollywood has seen unprecedented sales of offices and studios this year.
In November, Lincoln Property Company and Northwood Investors divested the Colorado Campus in Santa Monica for US$166 million. Earlier this month, Lincoln Property Company and Rockwood Capital received US$196 million when it sold a 22-story office building in Downtown Los Angeles.
But the biggest transaction in Los Angeles this year was Blackstone’s purchase of a 49 percent stake in 3 studios and 5 adjacent Grade A office blocks from Hudson Pacific Properties, which retained a 51 percent interest. The assets, which have an overall area of 2.2 million sq ft, are valued at a whopping US$1.65 billion.