Netflix and Hills: how streaming services are moving in on Hollywood real estate
Hollywood is constantly evolving, and on-demand streaming services like Netflix are having a big impact. Here, the Global Cities team looks at one real estate developer hoping to capitalise on the demand for studio space.
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Sitting at number six in the Global Cities Index, we rate Los Angeles as a top global city for a number of reasons. The city has:
- A broad-based economy that doesn't rely too heavily on a single sector
- A booming tourist trade
- Good transport and infrastructure
- Limited space: the area is naturally confined by the Hollywood Hills and the Port of Los Angeles. It also faces strict building regulations, making new construction challenging
(Check out 'The onging allure of LA real estate' for more detail)
Real estate developer Hudson Pacific Properties is just one of the companies that we think is making the most of the changing demand profile of its tenants. They have just signed a long-term lease with streaming giant Netflix for office and production space spanning over 25 acres and two historic studios.
The lease on the 'Icon' building is said to be the largest ever signed in Hollywood in terms of square footage. It's highly visible location is just west of the Hollywood Freeway, and the building aims to act as a gateway for Sunset Boulevard.
The deal is a good example of the way real estate companies are adapting for disruptor brands like Netflix, as demand for premium space grows. Over one third of Hudson's annual base rent is represented by tech giants like Google, Cisco and Square.
Hudson Pacific Properties' chairman and CEO Victor Coleman says the deal 'fulfills Hudson Pacific’s vision of bringing a major content producer to Hollywood, and highlights the changing nature of the studio business.'
The deal also plays to the idea that real estate companies are looking to adapt to the '24/7 demand' culture seen in global cities.
Christopher Barton, executive vice president at Hudson, suggests fundamental shifts in how content is created and distributed is driving demand in Hollywood, alongside a growing trend toward urbanisation: 'the preference for companies [is] to locate in 24/7, live-work-play neighborhoods.'
Take a tour of the space:
Read more at REIT.com: REITs Reshaping Communities: Hudson Pacific
Note: the regions and companies mentioned in this article are for illustrative purposes only and not a recommendation to buy or sell