Here’s what tenants pay at Blackstone and Worthe’s Tower at Burbank
Disney’s animation unit and WeWork are lease the most space at 490K sf building
When Blackstone acquired a 49 percent stake in Hudson Pacific Properties’ massive Hollywood real estate portfolio this month, it was a big bet on Los Angeles’ booming entertainment industry.
But it wasn’t the investment giant’s first.
In 2017, Blackstone picked up a portfolio of six office buildings in Burbank for its core-plus real estate business, which targets high-growth markets with value growth potential. The six separate deals included an 80-percent stake in the Tower at Burbank at 3900 West Alameda Avenue, where Disney is the largest tenant. Investor Jeffrey Worthe retained a minority stake, and his firm manages the property.
Last year, Blackstone landed a $195 million loan from Wells Fargo to refinance the 490,000-square-foot property, which was then packaged into three CMBS conduit transactions. As was the case with Blackstone’s recent studio buy, CMBS loan documents provide an inside look at the property’s rent roll.
As of last July, the 32-story office tower was 97-percent leased to 15 tenants in the media, entertainment, technology, real estate, finance and co-working sectors, with annual base rents ranging from $42 to $49 per square foot.
The 116,000-square-foot Disney lease was newly signed, with Disney’s animation unit set to start occupying the space this January. The second largest tenant, WeWork, signed a 15-year, 75,000-square-foot lease at the property in 2017, with two five-year renewal options and no termination options.
According to the loan prospectus, the property was just 4-percent occupied when Worthe first acquired it in 2014, and occupancy had risen to 55 percent when Blackstone acquired its stake. The joint venture has since invested $21.5 million in capital upgrades for the building, according to Kroll. Amenities include a fitness center, a cafe, and a tenant lounge with an arcade, pool table, and bar.