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Thursday, Mar 28, 2024

Plenty of Action in Studio City

By MICHAEL AUSHENKER Staff Reporter Located where the Valley narrows into the Cahuenga Pass, Studio City enjoys the glamour of show business and the market power that its limited real estate commands. During 2020, the submarket will see several new projects emerge, including a major mixed-use residential site; an athletic center and park; and, most notably, the reincarnation of the venerable Sportsman’s Lodge into an urban entertainment center with a hotel and retail center. Projects underway Originally called Laurelwood and long associated with Universal Studios, the neighborhood known as Studio City was named after a completely different studio, established in 1927 by Mack Sennett and today known as CBS Studio Center. “This has been a sought-after submarket for entertainment companies for quite some time,” said Jacob Mumper, vice president at Colliers International’s Encino office. “There are also major developments, both under construction and in planning phases, in neighboring markets, such as North Hollywood and Burbank, but no new major creative office or studio developments are being delivered in Studio City at this time.” The market caters to many smaller entertainment-related office tenants, such as attorneys and accountants. Among commercial projects currently under construction, the highest profile is the revamp of Sportsmen’s Lodge; The Crescent, Goldrich Kest’s upcoming mixed-use 106-unit complex; and an add-on to the Chase building at Lankershim Boulevard and Riverside Drive. The Shops at Sportsmen’s Lodge is a re-imagining of the property at the corner of Coldwater Canyon Avenue and Ventura Boulevard. Shortly after acquiring the property in 2017, Midwood Investment & Development announced plans to invest $100 million turn the Sportsmen’s Lodge event center into a retail center. According to the project’s website, the developer plans to create “the finest in upscale dining, retail, and health and wellness…With over 100,000 square feet of fitness, dining and retail, The Shops at Sportsmen’s Lodge will take its place as the center of Studio City. … The Shops at Sportsmen’s Lodge will bring a pedestrianized urban experience to residents and creative industry professionals in the San Fernando Valley.” In all, the revamped center will house an estimated 23 stores. Midwood has already signed two anchor tenants for the center: specialty grocery store Erewhon will take 11,000 square feet, while fitness center Equinox will fill a 30,000-square-foot club setting that includes a member lounge, spa, café and athleisure shop. Sportsmen’s Lodge on Ventura Boulevard was founded in the late 1930s as a roadside trout fishing attraction and evolved over time into a social events center popular for weddings, bar mitzvahs and other celebrations. Meanwhile, as construction continues on the retail side, the property’s hotel at 12825 Ventura Blvd. is primed for renovation. In December, Midwood announced plans to invest $2.25 million in renovations to the hotel during the next two years, including repainting and re-carpeting its hallways and installing new lighting and furniture. A sound system and lounge seating area has been added to the pool patio, and the interior of the café space was overhauled. “We look forward to investing more over the next two years to better serve our guests,” Ben Besley, Midwood’s senior vice president of development, said in a statement. Another big project is The Crescent at 11201 Ventura Blvd., Goldrich Kest’s upcoming 106 studio, one-, and two-bedroom apartments with 1,200 square feet of ground-floor retail space and 123 parking stalls. There is also the addition to the Chase building, a 1960s office structure found at the southwest corner of Lankershim Boulevard and Riverside Drive, that will see the construction of five stories comprised of 179 residential units, plus 5,684 square feet of ground-floor retail space and 263 parking stalls on two subterranean levels. TCA Architects is designing the revamp, which will feature an L-shaped podium extending to Lankershim and Riverside, with residential units above. Proposed amenities include two courtyards, including one with swimming pool. The new Chase building construction add-on is part of a larger mixed-use project under development by the Delijani family, which also calls for converting the adjoining office building into 55 apartments with 8,500 square feet of ground-floor retail. The proposed adaptive reuse of the seven-story building has already received approval, while the ground-up construction is contingent on the approval of a zone change and density bonus incentives, amongst other entitlement requests. In early 2019, the city of Los Angeles published an environmental report regarding the Delijani family’s plan to redevelop a parking lot in Studio City with a 179-unit mixed-use apartment complex. According to a 2007 L.A. Downtown News report, the family’s late patriarch, Ezat Delijani, developed in the adaptive reuse space, specifically refurbishing downtown L.A.’s fabled theaters and movie houses along Broadway throughout the 1980s. Before he passed away at the age of 83 in August 2011, Delijani and son Michael Delijani (under the business moniker Delson Investment Co.) bought and restored many properties along Broadway, including the 1911-built Palace Theatre; Los Angeles Theatre; the 1921-built State Theatre; and the Tower Theatre, since converted into an Apple Store. Complementing the campus A different type of Studio City project surrounds Weddington Golf and Tennis at 4141 Whitsett Ave. In October 2017, the Weddington family — after a scotched attempt to created 200 apartments in a 41-foot-tall structure with pedestrian paths and access points to the L.A. River — sold the property to Harvard-Westlake School for nearly $40 million. Post-acquisition, the school scuttled plans to build a parking lot across the street from campus after outraged neighbors in Coldwater Canyon vocalized their fears regarding construction and traffic. The school now plans to create an athletic center and a six-acre park on the 16-acre site, bounded by Whitsett Avenue and the L.A. River and located less than a mile from Harvard-Westlake’s campus. The completed campus, to be named Harvard-Westlake River Park, will also feature fountains, swimming pool, community room, locker rooms, underground parking and improved park amenities along the L.A. River. Existing tennis facilities will remain open to the public. However, in August 2019, school officials announced that an existing nine-hole golf course will shut down in 2021. ‘Apex of the Valley’ Studio City qualifies as more of a re-emerging market rather than a new or mature one. Real estate professionals say that Studio City is one of the most solid investments in San Fernando Valley. “There hasn’t been a significant amount of notable lease or sales transactions completed within the past 12 months, but overall leasing activity and market fundamentals in Studio City are strong and we can expect for that to continue for the foreseeable future,” Mumper with Colliers said. Todd Nathanson, founder of Encino-based Illi Commercial Real Estate, confirmed that investor interest in Studio City has been insatiable. Studio City, where Illi manages the Vons shopping site at Laurel Canyon and Ventura Boulevard and hosts boutique spaces around that location as well, is currently in the throes of selling a 30,000-square-foot retail property off-market, Nathanson said. Studio City has been a solid market “forever,” he said. “Studio City has been the apex of the San Fernando Valley. It’s sought-after. Rents are at the top of the market. These sites sell before you can put up signs.” For tenants, Nathanson noted, “the rents continue to increase well above $6 a foot.” In the 30 years that Nathanson has been in business, he said, that’s a record in the San Fernando Valley, dollar per square foot. He chalks up Studio City’s appeal to “the workforce, the income within a one-mile radius and boutique retail.” “It’s a hop, skip and a jump to Hollywood,” he continued. “Aside from being higher income, it’s also a younger more professional demographic as well.” “Studio City’s close proximity to major studios in Burbank, Hollywood and Universal City makes it a desired location for various companies throughout the entertainment industry,” Mumper added. “Moreover, Studio City is a viable submarket for Westside tenants looking for lower-cost alternative locations given Studio City’s close proximity to the 405 and 101 freeways and given Westside tenants’ aversion to deviate too far from this freeway interchange.” These two factors, Mumper continued, along with the ample amount of retail amenities throughout the area, has made the submarket attractive to user-owners and investors. “Considering that there is limited inventory of office or studio product in Studio City, that has led to low vacancy and high rental rates relative to the overall San Fernando Valley office market,” Mumper said.

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