The rising tide of original online programming—specifically from Netflix and Amazon—is causing rents, occupancy, and prices to rise in parts of Los Angeles. Aside from taking over swaths of commercial spaces, the streaming companies are on hiring binges and are also relocating employees to L.A. offices. In non-rent controlled residential L.A. neighborhoods, rents have risen by double-digit percentages since the beginning of 2016.
A survey this week of area landlords (commercial and residential) reported an 8.6 percent uptick in revenues in the third quarter, thanks in part to an increase in demand for space from the media and entertainment sectors. For example, Netflix recently inked a deal to lease multiple stages and production offices (totaling 99,250 square feet) at Bronson Studios on Sunset Boulevard in Hollywood. Netflix also leased the entire 323,000 square feet at the adjacent Icon office development on Sunset.
Amazon has been developing its own shows, including “Bosch” and “Transparent” which are filmed in Los Angeles. Netflix, which has original series hits like “Orange is the New Black,” also recently announced that it plans to have 50 percent of its content be original within 24 months.
These streaming media companies don’t really own their own fiscal facilities or professional studios, so they need to figure out a way to or use terminal warehouse space. “They’re going to up the spending,” says Julie Meggat of L.A. Luxe Group’s commercial division. “All the other players around them are going to do the same. Demand will increase, the amount of supply is going to stay pretty stable, which puts landlords in a very strong position.”
L.A. Luxe Group has placed a number of entertainment industry professionals working in online content in rentals and purchases in the third quarter. “Hollywood proper is once again a hot spot,” says L.A. Luxe Group Realtor Owen Pochman. “But so is nearby Los Feliz, and, of course, the Sunset Strip.”
By capitalizing on these industry shifts, we at L.A. Luxe Group are more able to sell our listings specifically to this new wave of buyers. We speak both of their languages—technology and creativity—when marketing our sellers’ and landlords’ listings accordingly. Drone videos, deftly-written descriptions, online floor plans, neighborhood information, and room-relational photo tours allow us to find a buyer or renter before they’ve even visited Los Angeles. “When they walk in to one of our listings,” says Principal Jeff Yarbrough, “It’s like their just confirming whether or not to buy it or rent it that day.”
How’s that for virtual reality?