Not far from the “beautiful downtown Burbank” pilloried by Johnny Carson, the gleaming towers of the city’s Media District have been a real estate success story, a prestige address for entertainment concerns.
But vacancies are increasing in what had been one of the country’s tightest office markets, an area in sharp contrast to the many empty offices a few miles away in downtown Los Angeles.
Several big entertainment companies, looking to consolidate or cut overhead, are moving out of leased space, or thinking of doing so:
o Sony Pictures Entertainment, which includes the Columbia and TriStar studios, has abandoned 200,000 square feet in the Studio Plaza building and plans to vacate another 200,000 square feet as part of its move to Culver City.
o Walt Disney Co. has leases expiring in 1994 and 1995 for 170,000 square feet in Tower Burbank and hasn’t decided whether to renew them.
o Warner Bros. may also leave hundreds of thousands of square feet vacant in Tower Burbank when it completes three new buildings of its own near its Burbank studio.
All of which means the Media District could see office vacancy percentages in the teens again — not bad compared with many markets, but unheard-of around here for three years.
The Media District office vacancy rate has increased from just 3% last year to 10%, and one developer said he believes it could hit 15% or more by mid-1994.
That compares with a first-quarter vacancy rate of 24% in downtown Los Angeles, and 17% for all the east San Fernando Valley area, of which Burbank is a part.
Despite it all, some real estate brokers are upbeat, saying the departure of entertainment tenants will merely make room for other business that were previously squeezed out of the desirable Media District.