With $16.5 million in Hollywood land sales already recorded for 2016, there’s promise of a decently heated market. In the first quarter alone, sales have nearly surpassed the $18.4 million total dollar volume of five years ago—evidence that since 2011, Hollywood land trading has been heating up, even if it’s been more of slow burn than a roaring flame.
“It’s going up, mostly,” says Rob McRitchie, senior vice president of JLL. “Hollywood’s interesting. As far back as the early 2000s, it was still a pretty tough stretch of market. Most entertainment companies wouldn’t look at it, they would opt for Burbank or Westside. But [in the last five years], there’s been a trend of moving back into urban areas.”
In 2015, $109.8 million in Hollywood land changed hands at an average of $206.85 per square foot, up from $16.7 million in 2013, which net an average of $84.28 per square foot, according to data from JLL. It’s a significant, steady increase from the average land price per square foot of $102.64 in 2011.
But these average square foot sales of $206.85 are simply that, “average,” says McRitchie. “Those numbers are quite low compared to marketable land that’s trading in Hollywood.”
McRitchie has witnessed trades at $600 a square foot, including the former Jack in the Box lot at 6409 Sunset Boulevard, on the corner of Sunset and Cahuenga Boulevard, that sold for $13.8 million to R.D. Olson in November 2014. The Irvine-based developer is hoping to get entitlements for a hotel on the site, which will continue to be occupied by Jack in the Box until 2019. McRitchie also points to other sites north of the Santa Monica Boulevard and Highland area, which have been fetching better-than-average prices.
“The overall trend has plateaued around the late $500s, early $600s on unentitled land because most of the blocks of land have traded,” he says.