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Hollywood Market Report Q3 2020 October 30, 2020

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Hollywood Market Report Q3 2020 October 30, 2020 HOLLYWOOD MARKET REPORT Q3 2020 OCTOBER 30, 2020 1 Contents 4 Letter from the President & CEO 6 Market Conditions and Development Updates 8 Residential 12 Office 14 Hotels & Tourism 16 Retail 18 Neighborhood Mobility 20 Spotlight on Hollywood 22 About 23 Context Map and Sources 24 Appendices 24 Tables 26 Demographics 28 Active Developments Summary Hollywood Market Report Q3 2020 – Published October 2020 3 Dear Reader, On behalf of The Hollywood Partnership’s 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 3rd Quarter 2020 market report. The quarter presented an opportunity to further settle into the realities of 2020, as mask wearing has become second nature, protests and demonstrations occur almost daily, QR readers have replaced our favorite restaurant’s menu, and we rarely joke about our impulse to shake hands. Since the publication of the last report, our team continues to doggedly track down and update information about the development pipeline and improve the way we collect information about the storefront business community. With each report, we also continue to add new facets of information and data. Beginning with this report, we have added regional hotel occupancy for comparison to the Hollywood submarket’s performance, plus boarding and alighting data regarding Metro red line operations. We have combined our proprietary pedestrian count data, air passenger data, and Metro rail data in a new section of the report specifically focused on transportation and mobility. As we did in previous reports, we have also taken time to personally interview 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 kept anonymous, but the qualitative takeaways lace throughout each of the report’s sections. We have expanded that outreach to include interviews with storefront business owners and managers. While some of that sentiment is used as background, others have allowed their words to appear quoted verbatim in this report. Importantly, and in response to the global pandemic and unfolding economic crisis, The Hollywood Partnership embarked on an expanded work plan that will better position the organization to advocate for Hollywood’s economic interests, implement strategies for a fair, clear, expedient, and predictable regulatory climate, support the retention of existing businesses, mitigate appearance of vacancy and blight via storefront activation strategies, and develop and implement strategies to stabilize and improve the composition of the neighborhood’s different storefront clusters. This work will build off our commitment to be the reliable clearinghouse for data and intel regarding the Hollywood market as espoused in these in quarterly reports. To help tackle this ambitious new body of work, we are proud to welcome a new Vice President of Advocacy and Economic Development: Davon Barbour. Davon joined our team on September 30th to lead the implementation of our new economic recovery workplan and other initiatives outlined in Goal 4 of our strategic plan. Davon’s considerable expertise includes facilitating public/private partnerships, business attraction, retail revitalization, and public policy and research. Davon has worked for private sector, public sector, and non -profit organizations, revitalizing urban communities across the nation. Before joining our team, Davon served as the Director of the Community & Economic Development Division for the Los Angeles County Development Authority where he oversaw the county’s redevelopment initiatives, revolving loan portfolio, construction administration, and the nation’s largest urban county district CDBG program. He played a lead role in developing and administering more than $100M in COVID-19 economic recovery programs including the now operational LA Regional COVID Fund. Before joining the County, Davon led economic development programs for business improvement districts in Baltimore, Miami, Orlando, and even Hollywood, FL. We are proud to share the third edition of our quarterly market reports with you. Though the context and data remain anything but ordinary, our quest for truth and accuracy provides a permanent marker for Letter from the the effects of the challenging times we are collectively experiencing. Stay safe and be well, President & CEO Kristopher Larson, AICP President & CEO Hollywood Market Report Q3 2020 – Published October 2020 5 Market Conditions and Development Updates At the close of Q3, signs of adaptation and recovery minor decrease quarter-over-quarter. Newly delivered emerged around Hollywood. Long term confidence is multi-family buildings, Archer and Lumina, welcomed a constant refrain among investors in the area, though tenants at the end of Q3, collectively introducing 523 impacts of the pandemic and its resultant layers of residential units (69 affordable) to the neighborhood. uncertainty impact sectors such as hospitality, retail, Lumina Hollywood and office space in uneven ways. Still, the neighborhood Meanwhile, the office sector is virtually frozen in time. had signs of both undeterred and novel confidence, The vacancy rate is less than ideal, but the Hollywood as longtime investors and new entries to the market submarket is faring better than those within its provided reasons for optimism and an eventual economic competitive set such as Downtown Los Angeles. Building rebound. A total of 77 development projects are slated for owners are exploring retrofits and improvements to their the Hollywood area – 38 of which are in the Hollywood buildings such as enhanced HVAC systems and touchless Entertainment District (HED). elevators, preparing for at least a continuation of the emerging behavioral norms. Less than one-third of office This report, prepared by The Hollywood Partnership employees have returned to work. (The HP), presents data and information within two geographical contexts. The larger of the two represents Few sectors are as affected as hotels, tourism, and the the greater Hollywood area, stretching from the southern storefront economy. While hotel occupancy figures now base of the hills and, stretching southward to Melrose approach 50% at the end of Q3, several Hollywood- and westerly to West Hollywood. Inside that greater area hotels remain closed. Few chose to participate in Hollywood area is a smaller, centralized area called LA County’s “Project Room Key,” which was intended the HED, which is the Property-Based Improvement to supplant traditional demand by providing short- District managed by The HP. A map of the corresponding term housing to the area’s most vulnerable, unhoused Hollywood Farmer’s Market geographies appears in the Appendix to this report, and populations through CARES Act and other funding each of the maps in this report features a legend that sources. Meanwhile, the storefront economy continued a Al Fresco Dining at Cabo Cantina identifies the two areas. trend towards reopening, up 4% from Q2, with some Food & Beverage operators sprawling into al fresco dining Despite the continuation of crises through Q3 2020, area experiences. Still, more than 30% of storefront businesses real estate is sustained by long-term optimism. The operating inside the HED remain closed due to the ‘pause’ first referenced in the Q1 2020 report continues as pandemic and public health orders. well, and hope for a vaccine and a bankable timeline for getting back to pre-pandemic norms rampantly resound. Altogether, the rate of decline within each property Construction continued unabated, with 735 residential type is improved compared to previous quarters. Some, units under construction within the HED. One project such as hotels, are showing encouraging signs given broke ground in Q3, and two others received entitlements. their V-shaped rate of rebounding occupancy. Look for Compared to cities such as New York or San Francisco additional impacts to and outlook for specific product and their precipitous drops in rental rates, average rental types in relation to the COVID-19 pandemic in the rates in LA and Hollywood are leveling off, with only a respective sections of this Q3 report. Hollywood Market Report Q3 2020 – Published October 2020 7 6220 Yucca – New Entitlement 6200 Sunset – Residential 38 Under Construction 22 KEY 46 39 HED 44 45 24 11 31 53 Completed 2 Archer (FKA: Hollywood and 21 Under Construction 27 Cherokee) – Introduced 224 43 Entitled (200 market rate, 24 affordable) 25 units to the market 14 Seeking Entitlement 37 26 42 54 35 20 8 4 23 41 3 Lumina – Completed 35 30 40 1 47 51 49 18 50 36 1601 N. Las Palmas 15 55 33 – New Entitlement 19 52 29 16 17 12 48 5 On Vine – Due for Completion 34 28 in Early Q1 2021 13 7 32 6 9 10 Active Projects 1 On Vine 10 901 Vine St 19 Sky Lexington 28 1025 N Wilcox Ave 37 Crossroads of the World 46 Hollywood Center 2 1621 N McCadden Place 11 Alta Ink 20 Sunset Rise 29 1130-1134 N Orange Drive 38 Montecito II 47 Hollywood Tower 3 6200 Sunset Blvd 12 Ariadne Getty Foundation Sr. Housing 21 1601 North Las Palmas 30 1375 St Andrews Pl 39 The Lombardi 48 1114 N St Andrews Pl 4 Wallace on Sunset 13 Barton Estates at Central Park 22 6220 Yucca 31 5600 Hollywood Blvd 40 PATHS Villa Hollywood 49 1301 N Cherokee Ave 5 5245 Santa Monica Blvd 14 Inspire Hollywood 23 6400 Sunset Blvd (Amoeba Tower) 32 5801-5809 Camerford Ave 41 1400 Vine Street 50 1310 Gordon St 6 5570
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