It was very good news for Hollywood on a number of fronts when we heard a week ago that Kilroy Realty had signed NeueHouse to a 93,000-sq.ft., 15-year lease at Columbia Square, now under construction.
It was a demonstration that there is indeed strong interest in the Hollywood office market. This bears out the faith that Kilroy Realty, Hudson Pacific, and J.H. Snyder have shown by making significant investments in Hollywood’s office sector. There hasn’t been a speculative office building erected in Hollywood in 30 years, so with more than 700,000-sq.ft. of spec space under construction, these firms are helping to shape the future of Hollywood.
NeueHouse is a New York operator of avant garde communal office space. They intend to take the incubator-office concept a step further by designing an environment where strangers can work independently or come together serendipitously. They will cater to people in the creative arts such as film, design, publishing, the performing arts and technology. They arrive on the heels of WeWork, another communal office space provider, which successfully launched in Hollywood a couple of years ago. Although WeWork has a slightly different niche than NeueHouse, it has demonstrated the potential that Hollywood has to serve this young, creative market.
I am sure that one of the things that NeueHouse found attractive was the thousands of young Millennials who have moved to Hollywood in the last 10 years. Over the past decade, 2,800 housing units have been built in central Hollywood. With another 1,600 under construction today, we are adding a solid base of young, educated and talented residents who will help to fill the new office buildings in Hollywood. Unlike previous generations, a significant portion of Millennials do not wish to commute from the suburbs and would rather locate in a central, high energy urban environment. Hollywood fits the bill. John Kilroy, Jr., the chairman of the board of Kilroy Realty, told us at our recent annual Economic Development Summit that 77-percent of Millennials plan to live in urban centers, which is why his firm has invested in Hollywood.
This synergy between a talented pool of young workers and quality office space built specifically to meet the needs of the Millennial generation should work well for Hollywood’s future.
NeueHouse is the first of many new firms that we anticipate will set up shop in Hollywood. We look forward to welcoming them to Hollywood, because, when it comes to building a strong community, it is all about jobs.
Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 22 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.