When we started in the mid-90’s converting buildings to creative office and getting top rents–everyone said it was a fad. During the dot com boom–we thought they were right. Many spaces were converted back to creative office.
Today, the Los Angeles Times reports that Jeff Worthe is going to convert a paradigm class A highrise tower in Burbank to creative office. The article states: “Another move will be to tear out the carpeted floors and dropped ceilings that were standard trappings of corporate office buildings in the 1980s but are now considered fusty to firms in creative fields such as entertainment…Offices will have polished concrete floors and exposed-concrete ceilings.”
This trend is causing a grounding shifting change in relative values. In 2005, BlackRock paid $160 million (or $333 per square foot) for this 480,000 square foot Burbank office tower leased to Disney. Jeff Worthe just paid $109 million or $227 per square foot for this class A highrise in the middle of the media capital. In contrast, someone just paid $305 per square foot for an empty raw industry building (with one per 1000 parking) next to our property in Culver City’s Hayden Tract. Long live brick and timber and bow truss ceilings.
The article is below.