Rapidly expanding Netflix grabs another big block of Hollywood office space
In another big expansion of its Hollywood footprint, video-streaming giant Netflix will lease 355,000 square feet of offices in a mixed-use complex under construction on Vine Street.
The company will rent the bulk of the space in three office buildings at Academy on Vine, landlord Kilroy Realty Corp. said Tuesday.
The lease will begin in 2020 when the $450-million office, apartment and retail complex is completed. It lies just south of the ArcLight Cinemas complex that is home to the famous Cinerama Dome movie theater.
Last month, another Hollywood landlord, Hudson Pacific Properties Inc., announced that Netflix would lease all of a 13-story tower it is building on Sunset Boulevard across from Sunset Bronson Studios. That lease for 328,000 square feet is also set to begin in 2020, when the tower, called Epic, will be completed.
The two recent leases, financial terms of which were not disclosed, are among the largest office leases of the year in Los Angeles County. The Los Gatos, Calif., media company already occupies offices on the Sunset Bronson lot totaling more than 400,000 square feet.
“Our expansion into the Academy on Vine property further deepens our connection with the Los Angeles and Hollywood communities,” Netflix Chief Financial Officer David Wells said in a statement. “We’re excited to continue to grow our team right in the heart of Hollywood.”
Netflix, which once relied on streaming licensed movies and television shows made by other studios, is on a growth streak as it aggressively remakes itself into a Hollywood player by creating a torrent of original content.
The company has forecast spending $7 billion to $8 billion this year on original and licensed content, up from about $6 billion last year. But some say the actual 2018 content spend will be higher. The Economist, citing data from Goldman Sachs, put the figure in the $12-billion to $13-billion range.
Last month, the publicly held company said it would issue about $2 billion in bonds to fund corporate activities, which it said could include content acquisition, production and development, and capital expenditures.
It also bought at least 18 billboards on the Sunset Strip in Hollywood in October in a deal estimated to be worth tens of millions of dollars. The company is using the coveted billboards on Sunset Boulevard to promote its shows, such as “House of Cards,” “Daredevil,” “The Chilling Adventures of Sabrina” and the animated “Big Mouth.”
A Times analysis in August showed a surge in “Netflix Original"-branded titles in the U.S. over the last three years. The number of new original titles released so far this year is more than triple the number from the same period in 2016. In August, more than 53% of new releases were Netflix Originals — the first time the company has added more original than licensed content on a monthly basis.
Kilroy Realty broke ground on Academy on Vine in June on a 3.5-acre block surrounded by Vine Street and De Longpre, Ivar and Homewood avenues.
Academy officials had planned to build a museum dedicated to cinema history on the property, next to the historic Pickford Center for Motion Picture Study on Vine Street.
In 2011, the academy announced that instead it would open the museum in a former May Co. department store at Wilshire Boulevard and Fairfax Avenue, next to the Los Angeles County Museum of Art. The Academy Museum of Motion Pictures is set to be completed next year.
8:40 a.m.: This article was updated with background on Netflix’s production of original content.
This article was originally published at 7:50 a.m.
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