NBC lot to get a massive remake
New owners of NBC Studios in Burbank unveiled plans Wednesday for $750 million worth of upgrades to the historic lot where top entertainers and newscasters have broadcast to the nation since the 1950s.
Under construction is the first of four 14-story office towers to be built over the next decade around the movie and television lot where Johnny Carson turned “beautiful downtown Burbank” into a running joke on “The Tonight Show.”
Today, Burbank’s Media District is one of the most sought-after office addresses in Southern California, with top rents and few vacancies.
The complex, to be renamed the Pointe, will be upgraded and operated as an independent studio with industry tenants making movies and television shows. The most noticeable change will be the towers and the emphasis on office space.
Leading the rush for offices are entertainment companies that have found they need more and more employees to bring movies, television shows and other products to market.
“A lot of companies prefer to operate on a lot,” said real estate broker Carl Muhlstein. “They can turn projects around with tighter controls and more efficiency.”
There are several reasons that demand for entertainment-related office space is growing, especially around Los Angeles County’s historic studios. Making movies and television shows requires more office space than ever as the scope of production grows.
The ratio of support staff to the number of people who actually perform in and produce some television shows, for instance, has doubled or even tripled in the last decade, said Muhlstein, an entertainment industry specialist with Cushman & Wakefield who negotiated the NBC deal.
“The typical talk show starring one person, like ‘Ellen,’ has 150 support staff,” Muhlstein said. “Jay Leno has 200.”
Most productions are now edited on computerized desktop systems on studio lots. Rough cutting, assembling DVD versions and re-formatting programming for new channels of distribution such as the Internet and cellphones are increasingly being performed on studio lots. Then there are spin-offs such as video games, tie-ins with fast-food restaurant chains and souvenir product licensing.
Capitalizing on this office trend is M. David Paul & Associates, a Santa Monica-based developer and landlord that owns more than half of the office space in Burbank and now holds title to NBC Studios as well.
The company acquired the studio in two separate purchases, landing the bulk of it late last year after NBC announced it would move its operations to a nearby location in Los Angeles across the street from Universal Studios.
Until then, NBC is leasing its space on the Burbank lot. The network hopes that the first of its new facilities will be ready by 2012. But NBC expects parts of its operations to remain well into the next decade.
“We plan to have a presence here for years to come,” said Tom Smith, head of West Coast real estate for NBC Universal.
M. David Paul has started work on the first of its four towers for the historic NBC site. Other additions to the lot will include underground parking, two outdoor plazas and a health club, a spa and a commissary for workers.
The property acquisitions and the new development will have a combined value of more than $1 billion, said Jeff Worthe, a principal at the firm. The office building under construction is expected to be completed in March, and the others will follow in sequence.
“We plan to do one tower every 2 1/2 years for the next 10 years,” Worthe said.
The developer doesn’t have tenants lined up for the new buildings, but the practice of building “on spec” makes sense when serving the entertainment industry, according to Worthe. Workers have more say about their environment than they do in many other businesses, and prospective tenants want to be sure what they are getting.
“You have to show them something,” Worthe said. “When they can stand on the floors and see the views, then they can commit.”
The credit crunch damping the nation’s real estate market shouldn’t delay the development process, because demand for entertainment remains strong, Worthe said.
“This isn’t about what the next 18 months will be like,” Worthe said, “but what the next 18 years will be like.”
The additions are in keeping with Burbank’s 1996 master plan, which laid out expansion parameters for local studios, said Deputy City Planner Joy Forbes. “It gave the studios some comfort of knowing that if they wanted to grow, their entitlement was in place.”
Other projects are in the works. The late Bob Hope’s family trust plans to build an office building soon at the corner of Olive and Alameda avenues, Forbes said, and Warner Bros. is entitled to build 2 million square feet of additions to its lot.
Warner is building a soundstage for movie or television production to be completed next year, but no new offices are planned, a studio spokeswoman said.
The entertainment office boom is also happening in Hollywood.
“We’re seeing a fairly consistent stream of tenants looking for space,” said Victor Coleman of Hudson Capital, which owns Sunset Gower Studios and Sunset Bronson Studios (formerly Tribune Studios). “The studio environment and camaraderie of being among similar companies seems to be a huge draw.”
Hudson is planning to expand office space at both studios, which date to the early days of Hollywood. Nearing completion at Sunset Gower, formerly Columbia Pictures headquarters, is an office building that will be leased to Technicolor.
The new Technicolor offices will make it easier to serve clients, said Ahmad Ouri, president of content services. A studio office can also lead to new business, which is part of the appeal, he said.
“Two filmmakers can meet on the lot and end up doing business together.”