Deluxe Media Leases Entire Hollywood Building

LOS ANGELES—Deluxe Media has signed a 40,315-square-foot office lease in Hollywood. It will consolidate all of its Los Angeles offices into the new location, which is located at 900 N. Seward Street. The building is a custom-built, single-tenant property and will be used for the company's post-production and editing services.

The property was formerly occupied by Todd Soundelux, which completed millions of dollars in upgrades on the property and installed post-production equipment before declaring bankruptcy in 2014. “Deluxe was the only user that would take advantage of the building's post-production and theater improvements,” Andrew Lustgarten, corporate managing director at Savills Studley, tells GlobeSt.com. “If Deluxe did not lease this location, the landlord would have demolished the existing improvements and marketed the building to the creative office tenant community.” Lustgarten represented the Deluxe Media in the transaction, along with his Savills Studley colleague Mark Sullivan, EVP and regional director.

Deluxe Media looked for a location for six months before settling on this property, which it chose because of the close proximity to studios and its clients. The lease has a 10-year term and includes building signage and an 85-space parking structure. According to sources unrelated to the deal but familiar with the Hollywood market, triple net lease properties average $2.50 per square foot, which would value this lease at $12 million.

“Hollywood continues to maintain its strong momentum for creative office users,” says Lustgarten. “The Hollywood market is extremely active right now and is getting a lot of looks from tenants in the surrounding markets.” The market is even attracting media companies from other parts of the city. Viacom, for example, just inked a major lease at Kilroy Realty's Columbia Square development in Hollywood, moving its headquarters offices from Santa Monica.