Though most offices were still closed in 2021, investor appetite for specific types of office properties was strong.
Studio real estate sales made up three of the top five office sales this year, with Hackman Capital Partners and Square Mile Capital Partners spending around $2 billion to acquire two production campuses.
Deals for studios ran in tandem with continued strong demand for content creation from streaming services and other entertainment outfits amid the pandemic. Money flowed into production-related real estate as institutional investors grew increasingly comfortable owning the asset class.
Apart from studio real estate, office investors appeared to be optimistic about some other segments of the market.
Most of the top deals occurred in submarkets with lower vacancy rates and more specialized tenants, such as Prospect Ridge Advisors’ $107 million purchase of an office tower in Burbank. Vacancy rates in the Burbank submarket were around 11.8 percent at the end of the third quarter, compared to 21 percent vacancy in Downtown Los Angeles, according to Newmark.
Here are the top ten office sales across Los Angeles County in 2021:
1. CBS Studio Center | Hackman Capital Partners, Square Mile Capital Management | $1.85 billion
(Source: Wikipedia/Cbl62)
In this year’s most expensive office deal, Hackman Capital Partners and Square Mile Capital Management bought the CBS Studio Center in Studio City for $1.85 billion.
ViacomCBS sold the 1 million-square-foot property at 4024 Radford Avenue in December to the two investment firms, which have become one of the largest owners of studio real estate across the country, buying up the 500,000-square-foot Kaufman Astoria Studios in New York as well.
The deal was also the priciest at $1,850 per square foot.
2. DreamWorks Campus | Brookfield Asset Management | $327 million
(Source: Nwmrk.com)
A distant second at $1.5 billion less than the top deal, but still a studio real estate deal.
In November, Brookfield Asset Management bought the 497,400-square-foot DreamWorks Campus in Glendale for $327 million — around $657 per square foot.
Seoul-based Hana Asset Management and Ocean West Capital Partners in El Segundo sold the seven-building property, after buying it for $297 million in 2017. DreamWorks has occupied the complex at 1000 Flower Street since it was built in 1997.
3. Torrance Technology Campus | Rexford Industrial Realty | $182 million
(Source: CommercialSearch)
Rexford Industrial Realty’s purchase of a 576,000-square-foot complex in Torrance is an office property now, but it might not be for too much longer.
The industrial landlord bought the complex for $182 million in August, saying it may construct a new industrial complex on the site once the tenants’ leases expire.
Defense contractor L3Harris leases around 80 percent of the property at 2100 Lomita Boulevard and 3121 Skypark Drive, while Torrance Memorial Medical Center and other tenants occupy the remaining space.
FRM Associates and Kansas-based Maxus Properties sold the property. The deal came out to around $316 per square foot.
4. Sony Studios | Hackman Capital Partners, Square Mile Capital Management | $161 million
(Source: LoopNet)
Hackman Capital and Square Mile Capital made the top five twice this year, with their second deal being the Sony Studios in Culver City.
In January, the duo spent $161 million to buy the 182,200-square-foot complex — around $885 per square foot.
Canada-based H&R REIT sold the property, which is used as Sony Pictures’ animation campus.
5. The Post in Beverly Hills | IRA Capital | $153 million
(Source: LoopNet)
Rounding out the top five office deals was the sale of a traditional office campus, fully leased to Live Nation Entertainment.
IRA Capital bought the 102,500-square-foot complex at 325 N. Maple Drive in Beverly Hills for $153.2 million — around $1,474 per square foot.
Worthe Real Estate Group and Invesco Real Estate sold the property, where Live Nation leases around 95,000 square feet through 2030.
6. AT&T Building in Hawthorne | Mapletree Industrial | $110 million
(Source: Mapletree Industrial Trust)
In May, Mapletree Industrial Trust purchased a 288,000-square-foot complex at 2301 West 120th Street in Hawthorne for $110 million. The property, which is leased to AT&T, was sold by Sila Realty Trust.
The deal came out to around $383 per square foot.
7. Burbank Empire Center | Prospect Ridge Advisors | $107 million
(Source: LoopNet)
In what was the most expensive office deal countywide in the third quarter, Prospect Ridge Advisors purchased a 234,000-square-foot complex in Burbank for $107 million, or around $456 per square foot.
Switzerland-based UBS Realty Investors sold the property at 2350 West Empire Avenue, after buying it for $80 million in 2015.
8. Lankershim Plaza in North Hollywood | DivcoWest | $92 million
In September, a joint venture between DivcoWest and GPA Companies bought a 200,000-square-foot complex at 5250 Lankershim Boulevard for $92 million, around $513 per square foot.
The office deal added a fourth property to DivcoWest’s Los Angeles County office portfolio, after the firm spent the last few years selling office properties in the area.
J.H. Snyder Company sold the property. Kaiser Permanente and co-working firm Regus both occupy space there.
9. 2600 Olive in Burbank | Pacshore Partners | $87 million
(Source: LoopNet)
Also in Burbank, Pacshore Partners bought a 152,800-square-foot office building at 2600 West Olive Avenue for $87 million in November.
The sale, which came to around $588 per square foot, was the most expensive deal in Burbank in terms of price per foot.
Granite Properties sold the complex, after buying it for $49 million in 2014 and spending $2.7 million on renovations.
10. Beverly Hills Medical Plaza | Meridian Property, Morgan Stanley | $82 million
(Source: LoopNet)
This year’s 10th-most expensive office deal was the sale of a medical office property in Beverly Hills.
In October Meridian Property and Morgan Stanley bought the 67,510-square-foot complex for $82 million. The deal was one of the most expensive deals in terms of price per square foot at around $1,207.
Tracey Darroll, a local real estate investor who runs Iris Capital Group, sold the property, which was 88 percent leased at the time of the sale.