LOS ANGELES—The Arts District is getting its long-awaited office catalyst. Powerhouse Warner Music had signed a 257,000-square-foot lease with Shorenstein at the Ford Factory in the Downtown Los Angeles neighborhood. The lease is expected to help spark activity in the market. While terms have not been disclosed, industry sources are saying that the lease is valued at $10 million annually, and that Warner Music will take occupancy next year.

“To attract this caliber of tenant presents a major shift for Downtown LA and the Arts District,” John Zanetos, the leasing broker at CBRE that represented the landlord in the transaction, tells GlobeSt.com. “This will instill confidence in other companies considering such a move as well as among property investors who have already made the leap or those who are currently eyeing this part of the city. This lease will act as a catalyst and no doubt have a domino effect on the entire neighborhood.” Zanetos represented the landlord along with Todd Doney, Rob Waller, Chris Penrose and Phil Ruhl.

This lease will have a tremendous impact on the market, not only because of the size of the lease but also because of the caliber of the tenant. “Warner Music is such a well-known and successful tenant,” adds Zanetos. “So, this deal isn't just about the size of the company moving in but also about the caliber of the tenant. This is a well-established powerhouse of a company that is going to attract other like-minded firms and bring in an incredible amount of people that will further activate this burgeoning neighborhood.”

Until now, many of the lease deals in this market have been small; however, the lease rates near those of markets with much higher demand in West Hollywood. The market has been built to appeal to creative tenants, but has yet to see a huge demand. “The Arts District has long been viewed as a creative hub of Los Angeles,” explains Zanetos. “Prior to this deal, the size of tenants in the neighborhood has been relatively small. Now, a large global firm is moving into the area, and it will cause other firms to look here as well.”