"If current activity continues its pace, 2008 should be anexcellent year," says John Tronson, a Ramsey-Shilling principal,who has worked in the market for almost 20 years. Tronson pointsout that developers and their equity partners in Hollywood areamong the biggest and strongest in the country, including thelocally based CIM Group, Legacy Partners of Northern California,the New York City-based Clarett Group, Houston-based CamdenProperties Trust and others.

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The Clarett Group is working on entitlements for a project thatwould add office space at the site of the Pantages Theater, and theCIM Group--in addition to its holdings and developments under wayin Hollywood--recently announced plans for a new office project innearby West Hollywood.

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[IMGCAP(2)]Tronson says that the demographics and political willto revitalize the submarket "are firmly in place" in Hollywood,which continues a renaissance of recent years that has produced newoffice, mixed-use, residential and retail developments. The area'soffice market consists of about four million sf, mainly on Sunsetand Hollywood boulevards between La Brea Avenue and VineStreet.

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Hollywood is one of a host of Westside Los Angeles officemarkets that continue to fare well despite the slowing US economy,according to the latest quarterly reports from major brokeragefirms. The reports generally cite strong demand, limitedconstruction and rising office rental rates as factors driving themarket. Onerecent report cited a list of more than a dozenentertainment firms with space requirements totaling more than 1.4million sf of renewals and/or new offices on the Westside.

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[IMGCAP(3)]"The demand for contiguous space blocks of 25,000feet or more is tremendous, but there is virtually nothingavailable in that category," in Hollywood, Tronson says. He notesthat the overall vacancy rate stands at about 7% in Hollywood andthat space is mostly appropriate for small, entrepreneurial tenantsrather than larger, more high-profile companies. Office vacancyrates hover around 5%, and both office and retail rents have grownabout 40% on average in the past 24 months, he reports.

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Several major developers have already moved to address that needfor large corporate space, Tronson points out. Among them are theLos Angeles-based J.H. Snyder Co.'s 200,000-sf low-rise campusproject at 959 Seward; CIM's high-end 200,000 sf office building at1635 Highland Ave. and Argent/Millenium's plans for its CapitolRecords superblock site on Vine Street. Other projects described inrecent GlobeSt.com reports include the Clarett Group and JamesNederlander's plan to develop a 10-story, 200,000-sf office towerabove the Pantages Theatre, a famed Hollywood venue that is next toa $400-million, mixed-use green development called Blvd6200 thatthe Clarett Group already has in the works. In addition, the CIMGroup's project in nearby West Hollywood, called the Lot, envisionsa 400,000-sf class A office development at the site of the formerWarner Hollywood Studios on Santa Monica Boulevard.

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In the residential/retail mixed-use category, the major projectsinclude Camden REIT's 400,000-sf mixed-use development on thesoutheast corner of Hollywood Boulevard and Selma Avenue, whichwill include 300 apartments over a 65,000-sf Whole Foods Market.Across the street will be a Trader Joe's Market anchoring the VineStreet frontage of the Legacy Partners' W Hotel, which will include350 apartments, 150 condos and 80,000 sf of retail.

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Adjacent to these projects is the biggest of them all, the1.1-million-sf Blvd6200, on Hollywood Boulevard, including 1,000residential units and 175,000 sf of retail. Tronson sees continuedgrowth of the retail sector in Hollywood, pointing out that Tesco,Urban Outfitters, Zara and Napoleon Perdis have recently signedlease commitments and stores that are vacant are being courted bythe likes of Nike, Electronic Arts and MySpace. He credits CIM forefforts to make Hollywood a premier, cosmopolitan shoppingdestination in the midst of a variety of residential andentertainment venues.

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