Granite Properties Profits In $90.5M Sale Of Burbank Media Office Building
A nearly 153K SF office building in the Burbank Media District has traded hands for nearly twice the price of its prior sale.
Granite Properties sold the 10-story building to Los Angeles-based Pacshore Partners for $90.5M, or about $592 per SF, in one of the priciest deals in the neighborhood this year. The sales price marks an 85% premium over the $49M Granite paid for the property in 2014.
Burbank’s Media District has been one of the bright spots in LA's office market since the onset of the coronavirus pandemic. In May, the neighborhood near Burbank’s southern border and the Los Angeles River had an office vacancy rate of less than 4%, according to Newmark. The neighborhood’s big-name tenants include studios for Warner Bros. and The Walt Disney Co.
“As the epicenter and backbone of LA’s expansive entertainment infrastructure, Burbank has benefited tremendously from the explosive growth of content providers, streaming or otherwise,” Newmark Executive Managing Director Rob Hannan said in a statement. Newmark represented Granite in the sale.
2600 Olive was 97% leased at the time of sale, counting “media-related companies" among its tenant roster, according to a release from Granite, Pacshore and Newmark. These tenants include “a rent roll of very high-quality names,” Hannan told Bisnow, which helped bolster the sales price.
Areas like Burbank and Culver City where streaming media and content companies have flocked have fared relatively better than average of late in terms of office demand. Many of these companies are expanding and adding office space at a time when many other occupiers are still holding off on making long-term decisions.
“We have been eagerly looking to invest in the Burbank Media District office market and 2600 Olive is a great start,” Pacshore Partners President Philip Orosco said in a statement. Orosco said that it planned to continue doing what Granite had done at the property: modernizing and managing it.
In the years that Granite owned the property, it spent more than $2.7M renovating the building’s lobby, elevators, bathrooms, garage and HVAC systems.
“The property has benefited from the thriving entertainment industry in the Burbank Media District and growing demand for media content,” Granite Properties Senior Managing Director Jason Purvis said in a statement.
Hannan said the property also represented an opportunity to acquire in a corner of Burbank where he estimates about 60% of the real estate is owned by Blackstone and Worthe Real Estate Group. The duo has a large presence in Burbank, and it is planning a 22-story tower near Warner Bros. and Burbank Studios that could break ground next year, The Wall Street Journal has reported.