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Warner Bros. Seeks ‘Old Hollywood Splendor’

Warner Bros. Entertainment will celebrate its major anniversary by reconfiguring the map of filmed entertainment capital Burbank. WarnerMedia-owned Warner Bros. announced April 15 a major expansion for its Burbank headquarters, which will include the acquisition of the Burbank Studios properties and the creation of a pair of Frank Gehry-designed office towers. Warner Bros. will purchase most of the Burbank Studios complex and become the sole and long-term tenant of the two Gehry towers, which Santa Monica-based Worthe Real Estate Group and partner Stockbridge Real Estate Fund will develop. In a joint statement by Warner Bros. Chief Financial Officer Kim Williams, Worthe Real Estate Group President Jeff Worthe and architect Gehry of Del Rey-headquartered Gehry Partners LLP, the development is called the Second Century Project in homage to the movie studio’s pending 100-year anniversary in 2023. Construction will begin this fall, with occupancy of Phase I slated for 2022 and completion of the entire project in 2023. Three-building sale As part of this deal, Worthe and Stockbridge will purchase three Warner Bros. properties — the Triangle Building (4001 W. Olive Ave.), Glass Building (3903 W. Olive Ave.) and Wood Building (111 N. Hollywood Way) — as well as the 30-acre Warner Bros. Ranch on Hollywood Way. Sales of the three buildings will take place in late 2019, with Warner Bros. leasing the space back from Worthe and Stockbridge until its employees are relocated to the new office space. Warner Bros.’ purchase of the Burbank Studios and sale of the Ranch will occur in 2023. Also, Warner Bros. will move employees from other leased areas surrounding its Burbank lot onto the new campus. Warner Bros. currently occupies about 1.2 million square feet of office space outside of its main lot, which can be folded into Burbank Studios along West Alameda Avenue. Worthe Real Estate Group and Stockbridge, Warner Bros. and Gehry Partners will work closely with agencies in Burbank throughout the construction process for a compliant, community-minded project, Warner Bros. said in a statement. Warner Bros.’ Williams characterized the deal in a statement as “an investment in our employees, our creative and business partners, and the Burbank community that will continue to be our home for decades to come.” “We are proud to continue our longstanding partnership with Warner Bros. which dates back over 30 years,” Worthe added in a statement. “We are thrilled to deliver these iconic buildings to Burbank and can’t think of a better way to honor Warner’s past 100 years and celebrate their exciting future. We will add these buildings to our existing portfolio of outstanding office properties that covers over 4 million square feet in the city of Burbank alone.” ‘Tonight Show’ legacy Burbank Studios features production office space, eight soundstages, a mill building and a commissary. Currently home to the soap opera “Days of Our Lives,” IHeartRadio Theater and Blizzard eSports Arena, the property once served as the long-time headquarters of NBC Entertainment as well as the site of Studio 1, where “The Tonight Show” starring Johnny Carson (and later with Jay Leno) was taped. The Ranch lot is where myriad productions were lensed, including the feature film “Lethal Weapon,” the TV series “Bewitched” and “I Dream of Jeannie” and the water fountain opening-credits sequence of “Friends.” Even after the sale is finalized, the Ranch will continue to operate as a studio and office complex, with as much as 1 million square feet open to potential development of more office and production facilities. Gehry, 90, is best known for such design-work as downtown Los Angeles’ Walt Disney Concert Hall and the Guggenheim Museum in Bilbao, Spain. A $1 billion, mixed-use complex called the Grand that he designed is currently under construction across the street from Disney Hall. The 800,000-square-foot Warner Bros. towers designed by Gehry will consist of one seven-story and one nine-story structure. The office buildings have been nicknamed “the iceberg towers” because the architect’s artistic concept resembles icebergs floating alongside the 134 freeway. “Once upon a time, Hollywood Studios had an important architectural presence in the city — they were like monuments to the movie-making process,” Gehry said in a statement. “With this project, I was trying to recapture that feeling of old Hollywood splendor.” Worthe told Los Angeles Times that he paid NBC in the $250 million range for the 35-acre lot in 2007. He is selling roughly three-quarters of the Burbank Studios property to Warner Bros. for an undisclosed amount. Worthe and partners, which includes New York-based real estate monolith Blackstone Group, remain the biggest landlords in Burbank and control 75 percent of the entertainment industry hub’s available office rental space. In addition to Warner Bros. and its subsidiaries, including DC Comics, existing Worthe tenants include Walt Disney Co., Fox, Sony, Viacom’s Nickelodeon and IHeartRadio. Financial terms of the Gehry towers lease were not revealed, but calculations based on analogous office deals suggest its value would surpass $800 million. The new campus should encompass office and production facilities devoted to producing streaming content. In 2018, more than 450 scripted shows were filmed for streamers, led by Netflix Inc., according to the Times. As Disney prepares to launch its Disney + service in November, WarnerMedia is poised to introduce its own streaming service that will feature Warner Bros. television and feature films. The Burbank studio launched its DC Universe streamer earlier this year — a subscription-based home for its live-action and animated superhero fare.

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.
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