HOLLYWOOD MARKET REPORT

Q2 2020 JULY 31, 2020 Contents

3 Letter from the President & CEO 4 Market Conditions and Development Updates 5 Residential 7 Office 8 Hotels & Tourism 9 Retail 10 Pedestrian Counts 11 Demographics 12 Spotlight on Hollywood 13 About The Hollywood Partnership 13 Map 13 Sources 14 Appendix 15 Active Developments Summary

Hollywood Market Report Q2 2020 – Published July 2020 Letter from the President & CEO

Dear Reader,

On behalf of The Hollywood Partnership’s (The HP) Board of Directors and its Advocacy and Economic Development Committee, thank you for your interest in learning more about the Hollywood community and for picking up our 2nd Quar- ter 2020 market report (Q2 2020 report). It has been one of the most unusual quarters in history, one where the threat of an economic superstorm became real – and that forecast has become today’s weather.

Since the publication of the last report, our team has worked to refine and update information about the development pipeline and improve the way we collect information about the storefront business community. The timing of the Q2 2020 report complicates the data on storefront businesses as dozens of storefronts remain boarded up – a remnant of the social activism, which was undoubtedly a headline from the second quarter (Q2). In some cases, the businesses behind the boards have limited ability to open, an effect of the public health orders. For others, businesses may have closed permanently due to the economic fallout from the pandemic or from severe looting. In each one of these cases, we are dismayed to see an entrepreneur and its team unable to survive these challenging times.

Also, in Q2 the desperately-needed Federal stimulus program delivered over $67B in PPP loans to Califor- nia-based companies, which was 13% of the program’s total budget – a proportional allocation based on the state’s population. Tenants across Los Angeles (LA) have also been propped up by local grants and other eco- nomic development subsidies, which have helped maintain leases through the quarter, despite much of that real estate sitting empty. Both commercial and residential tenants have been provided eviction protections through local ordinance, which have provided a stickiness factor for area occupancy across all product types. The net effect of the various subsidies and moratoriums is staving off attrition, which will be more accurately measured in Q3 if market factors alone prevail.

As with the Q1 2020 report, we have taken time to personally interview more than a dozen local real estate developers, investors, owners, and brokers as a component of our due diligence for producing this report. The interviews were aggregated and the sentiment anonymized, but the qualitative takeaways lace through each of the report’s sections.

There were a couple of events through Q2 that showed even storm clouds have silver linings. Hollywood office market juggernaut Netflix saw its stock value increase by 45% since the start of 2020, and its total subscribers increased by over 10 million in the second quarter alone. Additionally, LA has not enacted a shutdown of new construction, which has allowed the much-needed residential and commercial supply to make strides in catching up with demand. Lastly, we are beginning to see forces of creative destruction at work as innovative concepts such as ghost kitchens emerge, which will help to backfill the eventual vacant storefront spaces.

All this said, we are proud to share the second edition of our quarterly market reports with you. Though the con- text and data are anything but ordinary, our quest for truth and accuracy will provide a permanent marker for the effects of the crises we are collectively experiencing.

Stay safe and be well,

KRISTOPHER LARSON, AICP PRESIDENT & CEO

Hollywood Market Report Q2 2020 – Published July 2020 3 level of stimulus capital in the system plus property Market Conditions and owners not wanting to cut prices quickly given the long- term, positive outlook for the Hollywood submarket. To that end, there were very few market-based private Development Updates transactions in Q2. The duration of the ‘pause’ – a term used by many investors at the end of Q1 – was extended by interventions of public and private origin resulting in market conditions we may not fully understand for some time.

As the second quarter (Q2) came to a close, so did square feet of new office space, 2,700 additional hotel Property owners are feeling a great deal of vulnerability the ability to operate various businesses in LA County rooms, and nearly 900,000 square feet of active-use to political actions, which occur suddenly and without as gubernatorial declaration led to a retraction of the ground floor space. much analysis. There is a degree of psychological reopening phases and resulted in the first regional exhaustion as many property owners offered generous performance of ‘The Hammer and the Dance.’ Thanks This report, prepared by The HP, presents data and cuts and rent deferments at the onset of the pandemic to the continuation of construction, active investment information within two geographical contexts. The with many now asked to renegotiate a second time. in the built environment continued, which was critical larger of the two represents the greater Hollywood To that end, tenants – especially restaurateurs – are to help catch up with demand in LA and Hollywood in area stretching from the southern base of the hills frustrated after leveraging their remaining assets particular. Confidence in the long-term prospects of the and stretching southward to Melrose and westerly to to reopen toward the end of Q2 only to be told they Hollywood submarket remained strong at the end of Q2, West Hollywood. Inside that greater Hollywood area would have to close again. Both property owners with many investments continuing down the path toward is a smaller, centralized area called the Hollywood and businesses feel uneasy regarding the degree of Entertainment District (HED), which is the Property-Based responsibility that lies with a property or business owner ABOVE & BELOW: Hotel Roosevelt was one of many hotels to reopen across Hollywood during Q2 Improvement District managed by The HP. A map of the and the need to keep their tenants and employees safe. corresponding geographies appears in the Appendix to this report, and each of the maps in this report features a As shown in the corresponding sections of this report, legend that identifies the two areas. two of Hollywood’s traditionally stalwart sectors – hospitality and retail – are bearing the brunt of the Despite the various layers of crisis that emerged in economic challenges presented by the very real concerns Q2, area real estate is buoyed by sustained long-term associated with COVID-19. Consistent with our inaugural optimism. Area investors reported a flurry of activity Q1 2020 report, additional impacts on our outlook in restructuring and renegotiating debt, and some for specific product types in relation to the COVID-19 shared that cheaper debt is available for stabilized pandemic appear within their respective sections of this assets. Additionally, investors are remaining vigilant in Q2 2020 report. pursuing opportunistic transactions. Lease rates have not dramatically decreased, both a function of the immense

The construction of Archer (FKA: Hollywood Cherokee), a multi-family housing project, nears completion in the HED. delivery. Four new developments were announced in Q2, including two office and two residential projects. In total, seventy-four new development projects are currently in Mama Shelter re-opened during Q2 the pipeline for the greater Hollywood area, which will to offer outdoor dining on its rooftop. collectively deliver nearly 9,500 new housing units, 2M Photo Credit: Mama Shelter

Hollywood Market Report Q2 2020 – Published July 2020 4 Residential 12 34 38 KEY 43 14 1 HED 45 42 22 7 29 51 Under Construction 20 39 Entitled 25 41 23 Seeking Entitlement 13 33 24 40 3 52 Archer nearing 8 4 19 completion, 21 28 now preleasing 35 16 30 2 44 49

47 17 48 11 5 32 36 6 37 50 27 15 9 46

18 26 1621 N McCadden Place began construction 10 31 Active Projects

1 Archer (FKA Hollywood Cherokee) 10 901 Vine St 19 6200 Sunset Blvd 28 1375 St Andrews Pl 37 Skye Lexington 46 1114 N St Andrews Pl

2 On Vine 11 The Dream at Tamarind 20 1621 N McCadden Place 29 5600 Hollywood Blvd 38 Hollywood and Vine 47 1301 N Cherokee Ave

3 Lumina Hollywood 12 Highland & Franklin 21 6400 Sunset Blvd (Amoeba Tower) 30 5627 Fernwood Ave 39 1601 N Las Palmas Ave 48 1310 Gordon St

4 Wallace on Sunset 13 Inspire Hollywood 22 Hollywood and Gower 31 5801-5809 Camerford Ave 40 6007 Sunset Blvd 49 1333 Tamarind Ave

5 1276 N Western Ave 14 The Lombardi 23 Modera Argyle 32 Citrus & Highland 41 Artisan Hollywood Tower 50 5530 Virginia Ave

6 5608 La Mirada Avenue 15 McCadden Campus 24 Palladium Residences 33 Crossroads of the World 42 Hollywood Arts Collective 51 Entrepreneur

7 Alta Ink 16 The Reality at Tamarind 25 Selma Place 34 Montecito Phase II 43 Hollywood Center 52 SunWest

8 6630 Sunset 17 Rise Hollywood 26 1025 N Wilcox Ave 35 1400 Vine Street 44 Hollywood Tower

9 6901 Santa Monica Blvd 18 Sunset Rise 27 1130-1134 N Orange Drive 36 5817 W Lexington Ave 45 Hollywood and Wilcox 5 Residential COVID-19 related impacts MULTI-FAMILY MARKET AND DEVELOPMENT INSIGHTS With appreciation from their homebound tenants, many Q1 Q2 Q2 QoQ apartment communities throughout Hollywood have slowly Hollywood HED Hollywood Change begun reopening amenities such as gyms and pools. As property managers have installed and adapted to safer operating protocols, challenges with job losses and shuttered Total Residential Inventory (Units) - 5,319 15,461 - In Q2, housing development moved forward despite the industries will have a continued downstream impact on multi- pandemic grinding most sectors of the economy to a family products. Average Residential Vacancy Rate (%) 7.70% - 9.50% +1.80% halt. Construction continued at sites under construction Q2 rent collections remain strong relative to other product in Q1 as the City of Los Angeles designated housing types, with area property managers reporting rent collection in the 80th percentile. One of the mechanisms landlords are Avg. Price per Square Foot $3.00 - $2.93 -$0.07 construction an essential function of the workforce. While using to protect pricing is to offer extended free rent periods at no new multi-family projects were announced within the the front end of the lease as an enticement to sign a lease. $2,199 - $2,169 -$30 HED during Q2, efforts to move forward with entitled Nonetheless, the flip side of Hollywood’s allure as a place Avg. Rental Rate for One-BR projects and projects seeking entitlement were sustained. for aspiring talent to find entertainment industry success is beginning to show, as halts in production have parlayed into 4.2% - 4.4% +0.20% Of all the development product types, multi-family difficulty making rent. Moreover, and due to its predominance Cap Rate housing continues to demonstrate great strength of hospitality-based jobs, it is not surprising that the City Controller’s Office reported that unemployment in Hollywood’s 197 - 45 -152 in Hollywood. two City Council Districts have the two highest rates among Quarterly Absorption comparable districts in the City of LA. National conversations around the decline of rental rates With the extra $600 per week in enhanced unemployment Sources: CoStar, Hollywood Multi-Family Housing Report - Quarter Two 2020, Yardi Matrix, MySidewalk for housing units in major metropolitan areas due to the benefits set to expire at the end of July, renters experiencing pandemic do not indicate a substantial shift in rental unemployment may face tough Q3 decisions if the benefit is not extended in the fourth federal aid package. Compounding rates since quarantine was instituted at the end of Q1. the situation, the City of LA has established a moratorium on PIPELINE HOUSING UNITS The average price per square foot for a residential unit is residential evictions for as long as the emergency order is in place, providing renters unable to currently pay will pay with only down approximately 2% quarter-over-quarter (QoQ). the ability to defer unpaid amounts over the next 12 months. As Q2 HED Q2 Hollywood However, the uptick in vacancy may be an indication of such, protections are in place to prevent large scale eviction, but it will come at the cost of future earnings. Under Construction Multi-Family an anticipated increase in supply and waning demand in Developments Q3. This trend seems to be a direct result of the pandemic Market Rate 838 2,216 Remain Under as vacancy rates had been low in 2019 and in Q1. Though rates of absorption are lower for newer projects, Affordable 150 346 19 Construction most of which are 4 & 5-star units, this is a normal % Affordable 15% 14% across Hollywood The housing inventory occurrence when a new project enters the market. It is in greater Hollywood likely that vacancy rates will vary from project to project, TOTAL 988 2,562 is notably older with the most recently completed projects constituting Entitled 15% and largely rated the bulk of vacancies, which will bring down the average Market Rate 1,669 2,901 3-star or lower, vacancy rate for 4 & 5-star units. of Units Under Construction Affordable 79 325 are Affordable according to the CoStar rating system. The good news is that the Hollywood neighborhood will % Affordable 5% 10% In the HED alone, around 20% of the housing inventory continue to witness an increase in both market rate and TOTAL 1,748 3,226 was constructed within the last twenty years, largely 4 & affordable housing. More market rate units will amplify Seeking Entitlement 5-star units. Considering this breakdown of housing type, the inventory of housing in Hollywood, likely resulting Market Rate 2,317 3,122 rental rates and vacancies by rating vary substantially. in lower rental rates over the course of the next year. According to the Quarter Two CoStar Multi-Family Increase in supply combined with the bubbling impacts of Affordable 282 422 Housing Report, vacancies for 4 & 5-star units are the pandemic may make for a more affordable housing % Affordable 11% 12% approximately 20% across the greater Hollywood sub- market over the next several quarters. TOTAL 2,599 3,544 market, whereas vacancy rates of 3-star and 1 & 2-star 5,335 9,332 units are around 7%. Concurrently, effective rent for a ** Additional data can be found in the Appendix on MASTER TOTAL one-bedroom 4 & 5-star unit is just over $3,000 / month, page 26-27 Source: The Hollywood Partnership, Zone Information and Map which is substantially higher than the rate of 3-star units, Access System (ZIMAS) which sit at just over $2,100 / month. The gap between vacancy rates as well as rental rates may be impacted by COVID-19 and will be monitored closely over the next quarter.

Hollywood Market Report Q2 2020 – Published July 2020 6 Office COVID-19 related impacts The beginning of Q2 was very slow in office leasing as most tenants focused on implementing business continuity measures KEY and adjusting to working remotely. Very few private market transactions occurred across all of LA during the quarter. HED As seen in cities and CBDs across the county, office space Many firms have worked with property managers to reallocate development and the sector overall has yet to see price rent from the early months of the shutdown to those at the lat- ter portion of their leases. In a type of delayed-onset attrition, Under Construction corrections or any major shifts due to the COVID-19 some tenants have now exhausted their PPP and are exploring 6 outbreak. In Hollywood, which is a small but mighty office options to right size their leases. Entitled space submarket, Q2 appears to have been stable and The short and long-term effects of COVID-19 on the office even somewhat exceptional given the circumstances. sector remain unknown. Due to the multi-year nature of of- Seeking Entitlement fice leasing, the duration of the epidemic and corresponding Projects under construction are still moving forward, as emergency order will be major factors in both property owners’ are the projects entitled and seeking entitlement. Two and tenants’ ability to absorb or defer lost revenue. Outside of leasehold agreements, some economists and real estate ex- new projects were announced, one by Onni Group and perts have forecasted a continuation of remote work capability another by the Post Group and Plus Development. Both for at least a portion of all traditional office workers, as surveys 4 2 have shown that at least 40% of all workers currently working projects will be sited inside the HED. from home hope to maintain at least partial remote work flexi- bility once the pandemic has subsided. 7 8 The announcement of these two projects brings the total amount of square feet of office space seeking entitlements in the HED to 1,512,444 across a total of five May 2020. However, the health of the office space market development projects. If these projects are entitled and and office space development suggests that the job loss 1 proceed, these would increase the inventory of office is not likely taking hold in that workforce sector so much space across all of Hollywood by over 35%. These projects as it is impacting retail jobs in food and entertainment, and their progress will be an important indicator of the which represent the largest percentage of jobs in greater overall health and future for office space in a post- Hollywood. 5 pandemic reality. 6381 Hollywood Blvd. It should be noted that Hollywood is a unique “bubble” announced plans of office space with a large amount currently occupied by Netflix and other media companies with a strong stake in digital production including OpenTable, Viacom and others. According to data from the Bureau of Labor Statistics, despite unemployment skyrocketing to 20% The prevalence of digital media 3 9 across LA over Q2, Hollywood’s office space occupancy companies in Hollywood have insulated 1235 N Vine St. level is demonstrating great resiliency. This 20% job loss is the office market from experiencing consistent with Hollywood’s figures, as LAEDC projected broader attrition due to the pandemic. announced plans the job loss in Hollywood to be just over 7,000 jobs as of Another important headline from the office sector includes Blackstone’s investment in a 49% stake in Hudson Pacific’s media portfolio in June. According to Blackstone, this amounts to a 2.2M square foot collection of studio Active Projects 14% facilities and Class A office buildings valued at $1.65B. Overall Vacant Space in Hollywood ** Additional data can be found in the Appendix on 1 On Vine 6 6381 Hollywood Boulevard Vacancy Rates for Hollywood’s page 26-27 Comparable Office Markets: 2 Lumina Hollywood 7 Sunset + Wilcox Culver City (13.4%) 3 Harlow 8 Sunset Gower Studios Santa Monica (9.1%) 4 Crossroads of the World 9 1000 Seward Downtown Los Angeles (20.5%) 5 1235 N Vine Street

Hollywood Market Report Q2 2020 – Published July 2020 Source: Cushman & Wakefield, Los Angeles Office Report, Quarter Two 2020 7 Hotels & Tourism COVID-19 related impacts Many hotels in Hollywood were closed during the first half of Q2 and only reopened in the latter part of May and June. Individual hoteliers inside the HED report occupancy between 25-30% at the close of Q2, up from the 8-10% occupancy rate at the beginning of the quarter.

Hoteliers reported that the average length of stay is about two 15 nights, and that a good deal of business comes from online 13 travel agencies. They describe their customers as spontaneous 10 6 locals looking for nearby ‘staycation’ type activities. 5 At the end of Q1 and as stay-at-home orders set in, 14 the hotel and tourism industries felt the impact of the Business travel was described as very limited, though bookings 12 associated with entertainment are increasingly looking positive 16 pandemic in a more intense and immediate way than as the studios have restarted production. Given the traditional the multi-family and office sectors. As the backbone of dependency on long distance travel to markets such as Holly- wood, recovery in the hospitality and tourism industries are two 8 the Hollywood neighborhood, tourism is an essential of the hardest to forecast because of the influence of human 9 function of many businesses across the HED and greater uncertainty and fear of exposure to the virus. 4 Hollywood. While the onset of Q2 resulted in dismal 3 2 occupancy rates for hotels across Hollywood, changes 17 11 7 in government regulations and guidelines for operating As the rate of domestic and international travel increased businesses and stay-at-home orders encouraged a over the course of Q2, air travel increased. It should cautious return to central business districts and local be noted that domestic travel is increasing faster than destinations, including hotels. Additionally, a number international travel. In April, domestic air travel was down 1 of hotels remained open and bulked up their cleaning 95% YoY and international travel was down 97% YoY. By protocols while others closed and quickly reopened with June, domestic air travel was up relative to April, with new cleaning protocols in place. YoY travel down by 84%. International travel remained exceptionally low for June, at 95% YoY. The month of April had the most severe decline in hotel occupancy in Hollywood year-over-year (YoY). These Hotel development has remained steady with no changes figures correspond with air travel data, which revealed in the number of projects under construction, entitled, or that April had the lowest amount of inbound domestic seeking entitlement. and international travel of the quarter. Over the course KEY of May and June, occupancy steadily picked up by ** Additional data can be found in the Appendix on seventeen points. For the month of June 2020, hotel page 26-27 HED occupancy for Hollywood hotels was 32%. Overall for Q2, hotel occupancy averaged 24%. Under Construction

Entitled Q1 HOTEL MILESTONES Seeking Entitlement Hollywood Q2 2020 QoQ % Change YoY % Change Hotel Occupancy 24.11% -62.03% -71.86% Active Projects Hotel Room Demand 85,394 -71.62% -79.14% 92% Decline in LAX Passenger

Hotel Room Supply 354,171 -25.25% -25.89% Travel Year-Over-Year. 1 Godfrey Hotel 7 Ivar Gardens 13 1723 Wilcox Avenue

2 Hyatt’s Unbound Collection Hotel 8 Schrader Hotel 14 6751 Hollywood Boulevard Average Daily Rate $120.66 -39.85% -43.79% 3 Thompson Hotel 9 Selma Wilcox Hotel 15 Hollywood and Vine Revenue per Available Room $29.09 -77.16% -84.18% 4 Tommie Hotel 10 Whitley Hotel 16 Palmer Hotel 5 Whiskey Hotel 11 Crossroads of the World 17 Chaplin Hotel Source: Los Angeles Tourism & Convention Board (LATCB), Smith Travel Research 6 Citizen M 12 1700 N La Brea Avenue Hollywood Market Report Q2 2020 – Published July 2020 8 1 2 Q2 Openings & Milestones Retail As the largest retail type in the HED (39%), the future of Food & Beverage retail stands to have the greatest Float Coffee Shop opened in the impact on Hollywood. There are nearly 200 Food & historic Broadway Plaza building. Beverage locations across the HED. Many Food & This is the second location after 1Pasadena for this locally-owned Beverage businesses were able to remain open (41%) at business, which features its famous floats, scrumptious sand- the end of Q1 and continued operation throughout Q2. wiches, and cozy coffee. This is likely due to those businesses’ ability to swiftly 3 create or enhance take-out services. At the end of Q1, 71% of operating businesses in the HED were closed due to COVID-19. With changes to stay-at- Most Entertainment & Venue retail locations have The historic Hollywood Roosevelt home orders and new guidelines for businesses, a large reopened on May 23, signaling a remained closed since the end of Q1 with 94% of all hopeful return to a new normal. number of businesses have been able to reopen with Entertainment & Venue businesses closed in Q1 and Q2. 2With extensive safety protocols in place to protect guests and modified operations. As of June 2020, only 39% (197) of Other retail that has been mostly closed since Q1 are prevent the spread of COVID-19, businesses remain closed due to COVID-19. The types Destination Retail (80%) and Gifts & Souvenir shops (59%). hotel staff pivoted to ensure the hotel is able to weather the cur- of businesses that benefit most from the measures to rent crisis. Utilizing the downtime allow reopening are Fitness & Wellness, Apparel, and and reduced capacity, the hotel is currently renovating its lobby and Misc. Retail. Sixty-five percent (26) of the total number of COVID-19 related impacts ground floor restaurant, which will Fitness & Wellness retail locations re-opened during Q2. reopen as The Barish, an Italian steakhouse from famed restaura- Nationwide, YoY retail sales improved in May 2020 at only -6.1%, teur Nancy Silverton. compared to the same trend for April 2020, which fell 17.1% vs. Based on a rating system shared by the Los Angeles April 2019. However, only a few segments of retail are showing Economic Development Corporation, a large percentage growth over 2019 and those include e-commerce, grocery, food and beverage stores, building materials and garden equipment of the businesses within the HED are considered to be stores, and health and personal care stores. high-risk. This means these businesses are most likely to Love Burgers opened at 6363 Brokers in the Hollywood market describe the response of 4 5 Yucca, formerly occupied by see revenue and job loss more immediately than other area property owners as mixed – some have done whatever Good Greek Grill, which moved retail types. This includes Food & Beverage, Entertainment it takes to help a tenant sustain their lease; others see this as 3across the street. Keeping its prices an opportunity to vacate certain tenants and reposition their affordable for the AMDA students & Venues, Fitness & Wellness, Apparel, Gifts & Souvenirs, ground floor space for the end of the pandemic. Damage right next door, Love Burgers’ Misc. Retail (e.g. tattoo parlors, smoke shops) and and closure due to the riots, followed by the ratcheting up of menu includes highlights such operating restrictions, were described as a tough ‘one-two’ as the Spicy Burger topped with Destination Retail (e.g. theaters, large attractions). punch for landlords and tenants alike. Operating Food & Beverage in the HED Sriracha and cherry peppers and Collectively, there are 402 high-risk businesses in the HED, Monster Fries, which are beer At the close of the quarter, restaurant bookings on Open Table battered and topped with pickles 80% of all businesses in operation. and cheese. for the LA area were down 85% YoY, significantly higher than the comparable numbers across California (-65%), and the U.S. Based on the low number of (-64%). This is significant in Hollywood where Food & Beverage comprises a majority-plus segment of the storefront business permanent closures over the composition. The implementation of new social and operating protocol, combined with creative adaption of the public realm, quarter, attrition appears to be Turn Dough, selling world famous will be essential to increasing consumer confidence and thus slow for high-risk businesses. Chimney Cakes from Europe, 30% critical to the survival of many businesses. opened at 6771 Hollywood Blvd. Only fourteen businesses 4Inspired by trdelnik, the must-eat pastry from the Czech Republic, shuttered permanently (3% of 30% (58) 28% (55) Turn Dough’s goal is to show the of businesses (144) all operating businesses). The Still CLOSED Now OPEN European service method to the 14 locals and guests of Hollywood. stayed open in Q1 majority (8) of those businesses businesses permanently As American writer Ernestine and Q2 are Food & Beverage. That Ulmer said, “Life is uncertain; closed due to COVID-19 eat dessert first.” number also includes the closure and over half (8) are of Amoeba Records, which had already intended to move 1% (3) 41% (80) Food & Beverage. to a new location on Hollywood Boulevard by the end of Now Still OPEN 2020. However, Amoeba Records is expecting to reopen in 32% CLOSED its new location later in 2020. The most stable, or lowest- The Musso & Frank Grill, a Hollywood institution for over risk, retail types remain Pharmacy & Healthcare (100% a century, reopened its dining remained open), Auto Services (86% remained open), and of businesses (162) re- 5room on June 26 after mandatory COVID-19 shutdowns, only to be Personal Business Services (75% remained open). In total, opened in Q2 that were closed again four days later. As closed at the end of Q1 a result, the team pivoted to offer 144 businesses did not close in Q1 or Q2 due to COVID-19 take-out and delivery orders (29% of all retail in the HED). for the first time in the restau- rant’s history. Hollywood Market Report Q2 2020 – Published July 2020 9 Retail

pedestrian and cyclists tracked

pedestrian only

Hollywood Hollywood & Vine & Shrader

Selma & Cahuenga

Sunset & Vine

Hollywood & Highland

Pedestrian Counts LOCATION DAILY AVERAGE* PEAK HOUR 6,925 2pm To produce footfall counts for Hollywood, The HP recently installed five pedestrian Hollywood & Highland counters at key intersections within the HED. Not only will the counters provide relative pedestrian density information for different areas within the HED, they will Hollywood & Vine 4,330 4pm also help put into context the increase of foot traffic post-COVID-19. Additionally, the counters will help The HP understand the dynamics of each of these areas - how the Hollywood & Schrader 2,722 5pm pedestrian flow varies due to adjacent land uses and other variables such as events, seasonality, and weather. The counter at Hollywood & Highland is specialized to Sunset & Vine 1,072 11am better capture the size of crowds due to the character of that particular intersection. Selma & Cahuenga 842 7pm

*Due to the timing of the installation of the pedestrian counters, the Q2 report captures only a single day of data. However, future reports will include more detailed analysis of the pedestrian volume.

Hollywood Market Report Q2 2020 – Published July 2020 10 Race and Black Generations Educational Asian Ethnicity Hawaiian Attainment Silent/ 6% White Greatest Gen 5% Hispanic or Latino American Indian Baby 11% 50% Single Race Other Boomers 18% Two or More Races Other 20% People over Gen X 23% age 25 with 0.7% 0.6% Millennials 55% a Bachelor’s Demographics 42% 4.6% degree or higher 11.5% 8% in the HED and Gen Z 12% HED Hollywood Trade Area Residents Renowned for its appeal to 8.2% 0% 10% 20% 30% 40% 50% 60% tourists, Hollywood has long 28.0% Hollywood Trade Area Hollywood Entertainment District Enrollment Numbers been a place that people Hollywood Trade Area want to live, work, and play. K-12: Public/Private 46.4% 10,500 The recent boom in housing development has Millennials make up 55% of the brought a renewed focus on the livability of Holly- Post-Secondary population in the HED compared to wood. The trends over time speak for themselves 7,500 – Hollywood has and continues to appeal to people 55% 36% in Los Angeles as a whole. of all backgrounds.

3.5% This demographic analysis of Hollywood examines .04% .04% two geographies within the greater Hollywood area: 1) the Hollywood Entertainment District (the Household Incomes 5.8% HED) and 2) the Hollywood Trade Area (Hollywood Neighborhood and Hollywood Hills). The Holly- $80,000 wood Trade Area roughly includes the area within a 8.3% 2-mile radius of Hollywood & Highland. $70,000

These areas are examined side-by-side for two $60,000 reasons. The first - it is important to The HP to 52.0% understand the demography of the area within 29.6% $50,000 the area it manages, the HED. Understanding the unique traits of the HED can lead to more inten- $40,000 tional and impactful services. The second reason is the Hollywood Trade Area reflects the range of $30,000 residents and employees that play an essential role in supporting the Hollywood economy. Hollywood $20,000

Trade Area $10,000 1990 1995 2000 2005 2010 2015 2020 Source: MySidewalk, mysidewalk.com (American Community Survey, Census Bureau of Labor) Hollywood Entertainment District Hollywood Trade Area Los Angeles, CA

Hollywood Market Report Q2 2020 – Published July 2020 11 Spotlight on Hollywood

Black Lives Matter Volunteerism in the Community the Hollywood & Highland area. A second phase was Accolades & also funded, and collectively, the effort will restore more In response to the police killing of George Floyd in Members of The HP staff volunteered with the Central than 50% of the Walk of Fame by the end of 2020. Articles Minneapolis and racial injustice, civil unrest ensued Hollywood Neighborhood Council (CHNC) to package and people took to the streets of Hollywood. Though and deliver groceries to seniors during the initial months Open for Business April, 2020 – Plan for Hotel and Residential a small number of opportunists destroyed property, of the pandemic-related shutdowns. Over the course of Tower Moves Forward in Hollywood looted businesses, and vandalized our community, two months, CHNC and volunteers raised over $20,000 The HP created a “Currently Operating Businesses” May, 2020 – Hollywood Partnership to Light Up Tinseltown the demonstrations were overwhelmingly peaceful to purchase fresh veggies, fruit, bread, eggs, and section of our website so people can easily support the May, 2020 – Sunset Gower Studios Expan- and helped spur a larger conversation about equity cheese – funding two hotline operators and delivering local economy. The list is updated several times a week, sion Slated to Begin Construction in 2024 and systemic racism. In addition to protestors, artists weekly groceries to over 300 local senior citizens in need with staff scouring social media and websites and our June, 2020 – ‘Everything Already Stolen!’ convened in Hollywood and worked with property and of support. safety team going door-to-door to confirm the status of With Plywood and Paint, Businesses Seek business owners to paint murals over boarded-up businesses within the HED. Mercy, Express Solidarity storefronts. Many of the murals were created through Walk Of Fame Restoration June, 2020 – When Netflix Paid $14.4 Million a project coordinated by nonprofit group Arts Bridging 100th Anniversary for Pantages for Egyptian Theatre, It Saved an Ailing the Gap (The HP played a role in connecting artists with Due to historically low pedestrian activity on Hollywood American Cinematheque property managers). In response to the movement, The Boulevard, several partners came together to advance During the COVID shutdown, the Hollywood Pantages June, 2020 – City Councilmember Seeks CARES Act Funds for Walk of Fame Makeover HP’s Board of Directors unanimously adopted a statement a significant terrazzo restoration effort along the Walk of Theatre celebrated its 100th birthday on June 4, 2020. June, 2020 – Los Angeles Contemporary on racial equity in June, acknowledging that Black Lives Fame. Led by the Hollywood Historic Trust, in partnership Although the theatre was dark, its marquee reminded the Exhibitions: History & The Future Now on Matter, aspiring to becoming more representative, with The HP, the Hollywood Chamber of Commerce, community that this is “#OnlyIntermission.” Hollywood Blvd. inclusive, and supportive of marginalized groups. and LA City Council District 13, the first phase of the improvements began in May 2020 and were focused on Hollywood Market Report Q2 2020 – Published July 2020 12 THE HP STAFF

About The Kristopher Larson, AICP Map President and CEO

Hollywood Robert Benjamin GREATER HOLLYWOOD & HED BOUNDARIES Operations Manager

April Clemmer HED Boundary Communications & Administrative Coordinator Partnership Greater Hollywood Boundary* Cassie Hoeprich

Research Manager NOTE: Boundaries of the Holly- wood Trade Area from pg 20-21 Lorin Lappin For many years, the organization that manages the include the Greater Hollywood Business and Finance Manager Boundary as well as the Hollywood Hollywood Entertainment District (HED) Business Im- Hills neighborhood to the north. provement District was known within the community as Ruben Lechuga, EMBA Vice President of Urban Place Management “The Hollywood Property Owners Alliance” (HPOA), or more colloquially, “The BID.” As these pages illustrate Rich Sarian Place Enhancement Manager in great detail, change continues within the Hollywood community. Just as the community has evolved and Devin Strecker Vice President for Communication will continue to do so, the HPOA has evolved its name to become The Hollywood Partnership. THE HP BOARD The Hollywood Partnership (The HP) is a 501(c)6 nonprofit corporation that manages the HED. The HP Bill Humphrey, Hudson Pacific Properties – Chair Katie Ullman Zandona, Ullman Investments – Vice Chair is governed by dozens of property owners and stake- Frank Stephan, Clarett West Development – Secretary holders representing the diverse array of property C. Drew Planting, Goldstein Planting Investments – Treasurer types in the HED, including: office, industrial, residen- Leslie Blumberg, The Fonda Theatre tial, hotel, retail, nonprofit, and government uses. Amy Brown, Robertson Properties Group Brian Folb, Paramount Contractors & Developers David Gajda, Hollywood Media Center The HED is funded by more than 600 property owners Michael Gargano, Argent Ventures who assess themselves at more than $7.4M annually to David Green, Nederlander West Coast Sources Chase Gordon, Gordon California Properties, LLC pay for cleaning, safety, placemaking, communication, Chad Lewis, Klein Financial Corporation research, marketing, and advocacy services. In 2019, Jeffrey Moghavem, Archway Holdings PRIMARY SOURCE the HED was renewed for a period of ten years and Michael Nazzal, Yorkwood LLC The Hollywood Partnership expanded to include the area formerly known as the Michael Pogorzelski, Academy of Motion Picture Arts & Sciences Fred Rosenthal, Ametron Pro-Audio/Video Sales & Rentals Sunset & Vine District. David Twerdun, LeFrak Larry Wilkes, Related SECONDARY SOURCES Monica Yamada, CIM Group, Inc. RESIDENTIAL DEMOGRAPHICS Tony Zimbardi, AMDA College And Conservatory of Performing Arts Yardi Matrix, yardimatrix.com MySidewalk, mysidewalk.com (American Community Ex – Officio Members CoStar, costar.com Survey, Census Bureau of Labor) Rana Ghadban, Hollywood Chamber of Commerce Zone Information and Map Access System (ZIMAS) Dan Halden, Council District 13/Heart of Hollywood Mike Harkins, Hollywood + Highland This report was composed by Kristopher Larson and OFFICE Cassie Hoeprich. Data research and analysis was led Advocacy & Economic Development Committee Cushman & Wakefield, cushmanwakefield.com by Cassie Hoeprich. Copy was produced by Kristopher Michael Gargano, Committee Chair Larson, Cassie Hoeprich, and Devin Tait Strecker. Special Drew Planting David Gajda HOTEL & TOURISM thanks to the featured photographers. Dina Goldstein Los Angeles Tourism & Convention Bureau, Dave Lapidus discoverlosangeles.com If you have inquiries related to the data and Peggy Ings Los Angeles World Airports, lawa.org information presented in this document, please reach Monica Yamada London Kemp Smith Travel Research out to The HP’s Research Manager, Cassie Hoeprich, at Rana Ghadban [email protected]. Dan Halden

Hollywood Market Report Q2 2020 – Published July 2020 13 Appendix

Source: The Hollywood Partnership, Zone TABLE 1: PIPELINE RESIDENTIAL HOUSING UNITS Information and Map Access System (ZIMAS) TABLE 5: PIPELINE HOTEL ROOMS # of Projects in Q2 HED HOLLYWOOD HED HED HOLLYWOOD HOLLYWOOD # of projects # of rooms # of projects # of rooms Under Construction 5 19 Under Construction 5 820 5 820 Entitled 6 17 Entitled 5 820 6 1128 Proposed 9 16 Proposed 5 673 6 766 TOTAL 20 52 TOTAL 15 2,313 17 2,714

Source: The Hollywood Partnership, Zone Information and Map Access System (ZIMAS) TABLE 2: OFFICE SPACE MARKET AND DEVELOPMENT INSIGHTS

Hollywood Hollywood Hollywood QoQ QoQ % YoY YoY % TABLE 6: LAX AIR TRAVEL Q2 2019 Q1 2020 Q2 2020 Change Change Change Change Passenger Travel Totals Q2 2019 Q1 2020 Q2 2020 QoQ % YoY % Overall Asking Rents (per SF) $4.75 $4.41 $4.56 +$0.15 +3% -$0.19 -4% Class A Asking Rents (per SF) $4.80 $4.09 $4.66 +$0.57 +14% -$0.14 -3% Domestic 16,202,348 11,285,783 1,655,729 -85.33% -89.78% Inventory (SF) 3,822,212 4,369,143 4,369,143 - - +546,931 +14% International 6,680,075 4,501,539 253,224 -94.37% -96.21% 2020 YTD Absorption -108,352 -70,320 20,943 +91,263 +130% +129,295 +119% 22,882,423 15,787,322 1,908,953 -87.91% -91.66% Overall Vacant Space (SF) 198,145 714,542 611,459 -103,083 -14% +413,314 +209% Total

Overall Vacancy Rates 7.90% 16% 14% -2% -14% +6% +77% Source: Los Angeles World Airports (LAWA) Traffic Comparison (TCOM) 2020 YTD Leasing Activity (SF) 235,194 71,406 86,230 +14,824 +21% -148,964 -63%

Source: Cushman & Wakefield, Los Angeles Office Report, Quarter Two 2020

TABLE 3: PIPELINE OFFICE SQUARE FEET

HED HED HOLLYWOOD HOLLYWOOD # of projects SF # of projects SF

Under Construction 2 373,509 sf 3 502,234 sf

Entitled - - 1 95,000 sf

Proposed 5 1,512,444 sf 6 1,648,444 sf

TOTAL 7 1,885,953 sf 10 2,245,678 sf

Source: The Hollywood Partnership, Zone Information and Map Access System (ZIMAS)

TABLE 4: HOTEL MARKET INSIGHTS

Q2 HED Q2 HOLLYWOOD

Hotel Properties 28 63

Hotel Room Inventory 2,546 5,308

Source: Los Angeles Tourism & Convention Board (LATCB), Smith Travel Research

Hollywood Market Report Q2 2020 – Published July 2020 14 UNDER CONSTRUCTION Active Developments Summary ENTITLED HED + GREATER HOLLYWOOD AREA PROPOSED

HED TYPE NAME DEVELOPER ADDRESS # TOTAL TOTAL TOTAL UNITS MARKET AFFORDABLE AFFORDABLE HOTEL STORIES SQ FT OFFICE RETAIL RATE RATE UNITS RATE % ROOMS SQ FT SQ FT UNITS Y Hotel Godfrey Hotel Oxford Capital Group 1400 Cahuenga Blvd 8 74,362 - 3,713 - - - - 220 Y Hotel Hyatt's Unbound Collection PNK Group 1525 N Cahuenga Blvd 7 42,953 - 1,495 - - - - 64 Hotel Y Hotel Thompson Hotel Relevant Group 1541 Wilcox Ave 11 109,502 - 9,000 - - - - 190 Y Hotel Tommie Hotel Relevant Group 6516 Selma Ave 8 36,656 - 8,500 - - - - 212 Y Hotel Whiskey Hotel Adolfo Suaya 1717 Wilcox Ave 7 62,213 ------134 N Office Harlow Hudson Pacific Properties 1001 N Seward St 4 128,725 128,725 ------Y Office, Residential On Vine Kilroy Realty 1341 Vine St 20 498,599 335,509 13,000 196 196 0 0.0% - Y Office, Residential Lumina Hollywood CIM Group 5939 Sunset Blvd 22 324,693 38,000 7,700 299 254 45 17.7% - Y Residential 1621 N McCadden Pl Housing Diversity Corporation 1621 N McCadden Pl 8 - - 69 0 69 100% Y Residential Archer Jamison Properties 1718 N Las Palmas Ave 6 169,531 - 1,000 224 200 24 12.0% - Y Residential Wallace on Sunset Essex Property Trust 6254 Sunset Blvd 7 177,300 - 4,678 200 188 12 6.4% - N Residential 1276 N Western Avenue Wiseman Residential 1276 N Western Ave 6 54,855 - - 49 49 - 0% - N Residential 5608 W La Mirada Avenue Pedram Mehrian 5608 W La Mirada Ave - 18,915 - - 13 13 - 0% - N Residential 6630 Sunset A.J. Khair 6630 Sunset Blvd 5 33,824 - 6,112 35 35 - 0% - N Residential 6901 Santa Monica Blvd Onni Group 6901 W Santa Monica Blvd 7 218,316 - 14,093 231 216 15 6% - N Residential Alta Ink Wood Partners 5750 Hollywood Blvd 7 166,800 - 5,700 161 147 14 9% - N Residential Inspire Hollywood Bond Companies 1522-1538 Cassil Pl 8 107,012 - 1,089 200 190 10 5% - N Residential McCadden Campus LA LGBT Center and Thomas Safran & 1118 N McCadden Pl 6 69,585 - - 123 - 123 100% - Associates N Residential Rise Hollywood Cal-Coast Development and Rescore 1311 N Cahuenga Blvd 7 347,019 - 2,570 369 349 20 5% - N Residential Sunset Rise Wiseman Residential 7130 Sunset Blvd 5 55,140 - 3,427 60 53 7 12% - N Residential The Dream at Tamarind Strategic Legacy Investment Group 1310 Tamarind Ave 4 - - - 32 32 - 0% - N Residential The Reality at Tamarind Strategic Legacy Investment Group 1432-1436 Tamarind Ave 4 - - - 21 21 - 0% - N Residential 901 Vine Street Massoud Shabahang 901 Vine St 5 75,411 - - 76 69 7 9% - N Residential Highland & Franklin LRA Property Management 1840 N Highland Ave 6 166,00 - - 118 118 - 0% - N Residential The Lombardi MCAP Partners 1729 Bronson Ave 7 146,836 - - 86 86 - 0% - Y Hotel Citizen M Citizen M 1718 Vine Street 14 73,440 - 3,600 - - - - 240 Y Hotel Ivar Gardens R.D. Olson Development 6407 Sunset Blvd 21 141,895 - 1,900 - - - - 275 Y Hotel Schrader Hotel Koar Institutional Advisors 1600 N Schrader Blvd 11 83,605 - 5,557 - - - - 191 Y Hotel Selma Wilcox Hotel Relevant Group 6421 Selma Ave 8 90,282 - 22,000 - - - - 114 Y Hotel Whitley Hotel Whitley Apartments, LLC 1719 N Whitley Ave 10 99,375 ------156 N Hotel, Office, Crossroads of the World Harridge Development Group 6671 Sunset Blvd 30 13,00,000 95,000 190,000 950 845 105 11% 308 Residential Y Residential 6200 Sunset The Hanover Company 6200 Sunset Blvd 7 243,315 - 12,120 270 270 - 0% - Y Residential 6400 Sunset Boulevard GPI Companies 6400 Sunset Blvd 28 451,313 - 7,000 200 190 10 5.3% - (Amoeba Tower) Y Residential Hollywood and Gower 6104 Hollywood Boulevard, LLC 6100-6116 Hollywood Blvd 22 197,503 - 3,270 220 209 11 5.3% - Y Residential Modera Argyle Mill Creek Residential Trust 1546 Argyle Ave 7 260,250 - 30,431 276 263 13 4.9% - Y Residential Palladium Residences Crescent Heights 6215 Sunset Blvd 28 927,354 - 24,000 731 - 37 - - Y Residential Selma Place HBCS 6753 Selma Ave 7 20,000 - - 51 43 8 18.6% -

Hollywood Market Report Q2 2020 – Published July 2020 15 UNDER CONSTRUCTION Active Developments Summary Cont. ENTITLED HED + GREATER HOLLYWOOD AREA PROPOSED

HED TYPE NAME DEVELOPER ADDRESS # TOTAL TOTAL TOTAL UNITS MARKET AFFORDABLE AFFORDABLE HOTEL STORIES SQ FT OFFICE RETAIL RATE RATE UNITS RATE % ROOMS SQ FT SQ FT UNITS N Residential 1025 N Wilcox Avenue 1025 N Wilcox Avenue LP 1025 N Wilcox Ave 4 - - - 12 12 - 0% - N Residential 1130-1134 N Orange Drive MCAP Partners 1130-1134 N Orange Dr 5 - - - 24 21 3 13% - N Residential 1375 St. Andrews Nash-Holland 1375 St. Andrews 1375 St. Andrews Pl 8 226,160 - 1,279 185 185 - 0% - Investors, LLC N Residential 5600 Hollywood Blvd Hollywood Square, LLC 5600 Hollywood Blvd 7 28,371 - 32 29 3 9% - N Residential 5627 Fernwood Avenue PVH LA LP 5627 Fernwood Ave 6 - - 60 - 60 100% - N Residential 5801-5809 Camerford Ave Empire Property Group 5801-5809 Camerford Ave 4 41,995 - 36 31 5 14% - N Residential 5817 W Lexington Avenue 4D Development & Investments 5817 W Lexington Ave 5 - - - 21 19 2 10% - N Residential Citrus & Highland The Illulian Group 1242 North Citrus Ave 6 149,651 5,667 72 72 - 0% - N Residential Montecito Phase II Thomas Safran & Associates 6650 West Franklin Ave 6 53,370 - - 68 - 68 100% - N Residential Skye Lexington Skye Urban Home - Bernal Capital 6517-6533 Lexington Ave 3 - - - 18 18 - 0% - Y Hotel 1700 N La Brea Avenue PNK Group 1700-1710 N La Brea Ave 9 70,029 ------77 Y Hotel 1723 Wilcox Avenue Korman, Nathan 1723 Wilcox Ave 7 43,163 ------81 Y Hotel 6751 Hollywood Boulevard Mehdi Bolour 6751 Hollywood Blvd 12 ------168 Y Hotel, Residential Hollywood and Vine Champion Development 6220 Yucca St 32 333,930 - 6,890 191 152 39 25.7% 260 Y Hotel Palmer Hotel Artist Guild Hotels 6360-6366 Hollywood Blvd 10 ------87 Y Hotel Chaplin Hotel 7219-7225 West Sunset, LLC 7225 Sunset Blvd 11 ------93 Y Office 1235 N Vine Street The Post Group and Plus 1235 N Vine St 8 124,800 117,000 7,800 - - - - - Development Y Office 6381 Hollywood Blvd Onni Group 6381 Hollywood Blvd 14 217,269 210,000 6,500 - - - - - Y Office Sunset + Wilcox Millennium Partners 6450 Sunset Blvd 15 445,158 433,175 12,141 - - - - - Y Office Sunset Gower Studios Hudson Pacific Properties, Inc. 6050 W Sunset Blvd 18 628,000 628,000 - - - - 0% - N Office 1000 Seward The Post Group and Plus 1000 Seward St 10 - 136,000 14,400 - - - - - Development Y Residential 1400 Vine Patrick Tooley & Legacy Partners 1400 Vine St - 197,243 - 16,000 198 198 - 0% - Y Residential 1601 North Las Palmas RW Selby & Company 1601 N Las Palmas Ave - 28,000 - - 202 133 69 51.9% - Y Residential 6007 Sunset Boulevard CIM Group 6007 Sunset Blvd 7 45,000 - - 63 63 - 0% - Y Residential Artisan Hollywood Tower Artisan Realty Advisors 6350 Selma Ave 23 - - 6,576 290 261 29 11.1% - Y Residential Hollywood Arts Collective Thomas Safran & Associates 1637 N Wilcox Ave 7 - - 8,561 152 117 35 29.9% - Y Residential Hollywood Center MP Los Angeles 1720 Vine St 35 1,272,741 - 30,000 1,005 872 133 15.3% - Y Residential Hollywood Tower Onni Group 1360 N Vine St 21 475,423 - 68,988 429 413 16 3.9% - Y Residential Hollywood and Wilcox LeFrak Organization 6430 Hollywood Blvd 15 278,892 - 17,800 260 260 - 0% - N Residential 1114 N St. Andrews Place Bang Ja Kim 1114 NSt. Andrews Pl - - - - 60 54 6 10% - N Residential 1301 N Cherokee Avenue Uncommon Developers 1301 N Cherokee Ave - - - - 18 18 - 0% - N Residential 1310 Gordon Street Wiseman Residential 1310 Gordon St - - - - 60 55 5 8% - N Residential 1333 Tamarind Avenue Wiseman Residential 1333 Tamarind Ave 5 55,888 - - 45 41 4 9% - N Residential 5530 Virginia Avenue Bang Ja Kim 5530 Virginia Ave - - - - 64 57 7 11% - N Residential Entrepreneur ASB Properties 1657-1665 N Western Ave 7 - - 13,192 95 81 14 15% - N Residential SunWest Reliable Properties 1509 N Western Ave 6 - - 35,694 412 347 65 15.8% -

Hollywood Market Report Q2 2020 – Published July 2020 16 The Hollywood Partnership 6562 Hollywood Boulevard Los Angeles, CA 90028 323.463.6767

hollywoodpartnership.com hollywoodpartnership

Hollywood Market Report Q2 2020 – Published July 2020