LOS ANGELES—Kilroy Realty has signed four new leases at its Sunset Media Center, located in the center of Hollywood. Tax Credit Co., Inside Weddings, Wind Dancer Films and DHX Media are the companies to join the tenant roster at the 321,883-square-foot vertical creative office campus. In total, these businesses have leased 21,848 square feet of space with Tax Credit Co. leasing the largest space at 12,898 square feet.
Kilroy has recently completed a multimillion-dollar renovation of the campus, which has served to drive rental rates up. Since purchasing the building two years ago for $79 million, rental rates in the building have increased from $2.85 per square foot to $3.90 per square foot. “Increasing demand and lack of supply for class-A creative office with views in the ever improving Hollywood submarket is putting upward pressure on rental rates,” Nicole Mihalka, a JLL broker who represented Kilroy Realty in each of the transactions, tells GlobeSt.com. Mihalka represented Kilroy along with her JLL colleagues Carl Muhlstein, Hayley Blockley and Blake Thomas, a team that handles leasing for the complex.
Although there is some diversity in the tenant mix, Mihalka explains that mainly media and entertainment and tech and Internet companies have been attracted to the space. “A common thread among these tenants is a desire to be in a central geographic location close to both talent and principals, and proximity to exceptional amenities, hotels, residential options and the metro, along with an attraction to a class-A, vertical creative campus environment,” she says. “It’s a recruiting tool for growing companies.”
Kilroy also recently signed leases with Style Haul for 6,602 square feet and Slickdeals for 6,644 square feet of space. Although the area is adjacent to the Downtown market, which is also vying for creative office tenants, brokers aren’t seeing too much competition. “Hollywood benefits from the massing of after-work and weekend amenities as compared with the Central Business District and the Arts District, which doesn’t have class-A creative office,” Mihalka explains. “The quality of space Kilroy delivers continues to attract media and entertainment tenants, which, in turn, makes it attractive to other, like-minded companies.”
Kilroy has put a pretty big stake in the Hollywood office market. In addition to the Sunset Media Center, it will soon unveil Columbia Square, a 350,000-square-foot, $380-million office development at the former CBS Studio lot. In addition to office space, the site will include long- and short-term rental units and retail.