Warner Bros. Opts to Consolidate in Large Burbank Lease
Warner Bros. has signed one of the biggest office leases this year in the U.S., agreeing to take 456,000 square feet in a Burbank tower as the studio consolidates executive offices from other sites.
The 15-year lease at Studio Plaza on Riverside Drive is valued at more than $250 million, said real estate broker Matt Hargrove, who represented Warner in negotiations with landlord Douglas Emmett, a Santa Monica-based real estate company.
Warner will take control of the space in January and start remodeling for a phased move beginning in the summer. Most of the 1,500 to 2,000 employees who will work in the tower will be from the studio’s home-video division, which is spread among a handful of nearby offices.
The 14-year-old building is 100% leased by Sony Corp., whose term expires at the end of the year, real estate sources said. It has sublet space to other tenants including radio station KIIS-FM (102.7), Columbia Pictures Industries and Corday Productions.
The agreement for 456,000 square feet at Studio Plaza, signed Tuesday, is the largest office deal of the year in the West and the sixth-largest in the country, according to statistics compiled by CoStar Group Inc., a real estate data provider. It surpasses the 245,000-square-foot lease for office space in the Playa Vista development in Los Angeles signed by video game maker Electronic Arts Inc.
The presence of some studios has made the Burbank Media District one of the strongest office markets in Los Angeles County, with vacancy rates in the single digits, said Hargrove.
Warner Music, another Warner division, last year agreed to become the lead tenant in another Burbank office building, the Pinnacle, which is across the Ventura Freeway from Studio Plaza. The multi-label recording group, whose artists include Madonna and the Red Hot Chili Peppers, consolidated other offices in a 195,000-square-foot lease estimated to have a value of $120 million.
In January, Clear Channel Communications Inc. agreed to consolidate its eight Los Angeles area radio stations and 400 employees in 95,000 square feet at the Pinnacle. The agreement, which called for building 40 radio studios on the premises, was valued at $45 million.
More than 1 million square feet of office space has been leased in Burbank this year, making it the third-busiest market in the county behind the larger markets of downtown Los Angeles and Santa Monica, said Larry Dressel, chief operating officer of CoStar.
“Burbank continues to be a very active and very strong market,” Dressel said.
