Blackstone partners with Worthe Real Estate on 500K sf office tower

Blackstone Group and Worthe Real Estate Group plan to develop a 500,000-square-foot office tower near Burbank and Warner Bros. studios, as companies like Netflix and Amazon ramp up their content creation.

The project would be among Los Angeles’ largest office developments this year, and would be marketed to entertainment business tenants, according to the Wall Street Journal. The partnership plans to break ground on the project in 2022.

The development site is across the street from the 35-acre Burbank Studios, and next door to a similarly large office building that’s fully leased thanks in part to demand from the studio.

Overall demand for office space has plummeted in L.A. since the pandemic forced workers home. Demand for space serving television, film, and online platforms has been more stable thanks in part because of demand for content from homebound consumers.

Netflix signed the biggest lease of the year in September when it scooped up 171,000 square feet at the Burbank Empire Center.
“Content creation is one of our highest conviction themes,” said Nadeem Meghji, Blackstone’s head of real estate Americas, told the Journal. “We’re seeing long-term demand growth.”

Blackstone and Jeff Worthe-led Worthe Real Estate formed their partnership in 2017 and together have invested $1.7 billion to own 13 buildings and five development parcels.

It’s Blackstone’s second major investment in the media production business in L.A. this year. Over the summer, the firm bought a 49 percent stake in Hudson Pacific Properties’ Hollywood studio and office portfolio. They just won approval to add 500,000 square feet of office and production space to Sunset Gower Studios. [WSJ] — Dennis Lynch