Backing Sought for Warner Bros. HQ Project
A developer is seeking $725 million of debt to finance the construction of an office complex for Warner Bros. in Burbank, Calif.
A partnership between Worthe Real Estate and Stockbridge Capital is talking to lenders, via Eastdil Secured, about a floating-rate loan with a term of five years. The proceeds would go toward developing some 810,000 square feet of offices that the movie and media giant has agreed to fully lease.
Groundbreaking is slated for later this year, with completion expected in 2023. The plans call for two buildings designed by renowned architect Frank Gehry. The larger building will have nine stories and 455,000 sf, while the other will have seven stories and 355,000 sf. The site is on the grounds of Burbank Studios, at 3000 West Alameda Avenue, adjacent to Warner’s headquarters.
The project is part of a larger deal between the Worthe partnership and Warner. Under an agreement struck last month, Worthe and Stockbridge will sell Burbank Studios to Warner, while retaining ownership of the 7-acre parcel where the partners will build the new offices. In turn, Warner will sell the Worthe team another production facility — Warner Bros. Ranch, a couple of miles away at 411 North Hollywood Way — and three other Burbank office buildings. The movie company will lease back space in those buildings until the new complex is completed.
The overall transaction will allow Warner to consolidate its offices in the new buildings and incorporate the Burbank Studios campus into its headquarters, while Worthe and Stockbridge acquire another production facility and three office buildings they can lease up. Those are the Triangle Building, at 4001 West Olive Avenue; the Glass Building, at 3903 West Olive Avenue; and the Wood Building, at 111 North Hollywood Way.
Burbank Studios is just off the Ventura Freeway, about 12 miles northwest of downtown Los Angeles. Worthe and Stockbridge purchased the property in 2007 from General Electric, then the owner of NBC, for $249.6 million.