×
You will be redirected back to your article in seconds

Record ruling ups Sony’s rent by $20M

Tenant, landlord disagree on increase

Sony has lost one of the largest rent arbitrations on record in a dispute with Transpacific Development Corp., the landlord for Sony Pictures Plaza at 10000 Washington Blvd. in Culver City.

The building, across the street from Sony’s studio complex, is under a long-term lease in which the rent is reset to market every five years. The problem is getting both the landlord and tenant to agree on what is a fair market rent.

In this case, Sony thought the rent should be $390,000 per month but Transpacific thought it should be $710,000 per month — an unusually large difference of opinion.

The matter was decided earlier this month in what is called a “baseball arbitration,” in which an arbitrator must decide to use one of the figures presented by the quarreling parties — splitting the difference or coming up with a compromise rent is not allowed.

There is an incentive in a baseball arbitration for both parties to present a figure that is as close as possible to the fair market value, or what an arbitrator would determine, because the arbitrator must pick the figure that is closest to his own. People close to the matter say the arbitrator’s figure was right in the middle, but leaned toward the landlord by less than half of one percent.

“The arbitrator said it was an extremely close call; unfortunately, this time around things didn’t go our way,” a Sony spokesman said.

Attorney Tony Natsis, a partner with law firm Allen Matkins Leck Gamble & Mallory, who represented Transpacific in the matter, said the difference between the rents suggested by the two sides amounted to nearly $20 million over five years, a record for a rent arbitration.

Real estate experts noted that determining a market rent for a building such as the 330,000-square-foot Sony Pictures Plaza, which is unique in its size and location, is very difficult because there are no comparable buildings nearby to use as a reference.

More Scene

  • Barbra Streisand and Gisele Bundchen

    Barbra Streisand and Gisele Bündchen to Be Honored at UCLA Science Gala

    Science can be very glamorous. It certainly will be during Oscar week on Feb. 21 when the UCLA Institute of the Environment & Sustainability (IoES) honors Barbra Streisand and Gisele Bündchen for environmental activism at its annual Hollywood for Science Gala. “When I moved to LA, the air was unbreathable. Rivers were catching fire in [...]

  • Don Cheadle and Andrew Rannells Black

    Don Cheadle, Andrew Rannells Talk Snorting 'Coke' on 'Black Monday'

    “Black Monday” show creators David Caspe and Jordan Cahen divulged an intriguing detail to come later in the first season of the new Showtime comedy at its world premiere, held at the Theatre at Ace Hotel on Monday night in Los Angeles. “The fourth or fifth episode opens with a sexual harassment seminar, which very well [...]

  • Alfonso Cuaron attends the 44th Annual

    Alfonso Cuarón to LAFCA: 'Thanks to Your Help We Can Break Down Walls'

    Inclusion was the big winner at the L.A. Film Critics Association Awards, which was held Saturday night at the InterContinental in Century City. “This year’s winners are the most diverse in LAFCA’s 43-year history,” announced its president, Claudia Puig, adding that 14 out of their 18 awards were won by women and people of color. [...]

  • Mandatory Credit: Photo by Max Malandrino/REX/Shutterstock

    Hollywood Power Players Assemble to Save Iconic Deli Nate 'n Al

    A group of Hollywood executives and celebrities have banded together with the intent to save Beverly Hills deli and star haunt Nate ‘n Al, a stone’s throw from tourist destination Rodeo Drive. A consortium of investors including music kingpin Irving Azoff and wife Shelli, Universal Filmed Entertainment Group chairman Jeff Shell, and Rande Gerber and [...]

  • Charlie Collier, FOX Chief Executive Officer

    'The Passage' Team Talks Diversifying Races, Genders and Ages of Book Characters

    “The Passage” star Saniyya Sidney was unaware that the book version of her character was originally white until her father, a fan of Justin Cronin’s apocalyptic trilogy, informed her during the audition process. “I was like, ‘Oh, she is?'” Sidney told Variety at Thursday’s series premiere in Santa Monica, Calif. “And when I got it, [...]

  • MAYFAIR HOTEL - Ballroom

    The New Space Race Energizes Awards Party Scene

    When planning an elegant A-list dinner for 10 to gala parties for a thousand, event planners have a sophisticated mix of locations to choose from in New York and Los Angeles. Variety looks at new and updated venues that cater to gatherings during Hollywood’s awards season, and throughout the year welcome all kinds of happenings [...]

More From Our Brands

Access exclusive content