"Techtainment" Is Keeping the Hollywood Office Market Alive

The office sector is riddled with questions marks following the pandemic, and many markets are reporting steep decreases in leasing activity—but Hollywood owners are still seeing demand. BLT Enterprises, an owner of boutique office space in the market says that technology-driven entertainment companies, also known as techtainment, are still actively leasing space.

“With production in Hollywood and other areas of L.A. responsible for a significant amount of both direct and indirect employment, we anticipate creative office will thrive with demand from diverse tenants, as long as the major players remain in the market,” Bernard Huberman, founder and president of BLT Enterprises, tells GlobeSt.com.

BLT entered the Hollywood market a year before the pandemic in response to rising demand from techtainment companies, and specifically invested in production studios and soundstages. It currently owns 200,000 square feet of office space and development space that could accommodate another 450,000 square feet of creative office. So far, it hasn’t changed its strategy in the market due to the pandemic. “While some companies have shifted to more virtual models, many have realized just how critical ongoing, in-person collaboration is to their business,” says Huberman. “The good news is that several office trends on the rise before the pandemic are well suited to keeping employees safe, healthy, and comfortable going forward.”

However, BLT has made some changes to respond to new health and safety needs born during the pandemic. “As part of recent and current renovations and build-outs, we’re implementing several COVID-conscious upgrades,” says Huberman. “This includes installing the highest quality HVAC systems, as well as touchless doors and fixtures. We are also increasing tenant and guest ability to avoid elevators and narrow hallways where possible.”

Outdoor spaces have also become more important. “Outdoor amenity spaces will become a larger selling point going forward, as they will be more frequently utilized for lunches, socialization, and even team meetings,” says Huberman. “Developers and owners will likely put an increased emphasis on attractive landscaping, comfortable outdoor furniture, and unique touches like exterior murals.”

While BLT is continuing to see strong demand, overall, the Los Angeles office market is suffering. A report earlier this year from Savills said that office leasing totaled only 10 million square feet last year, the lowest in 20 years. From 2019, office leasing is down 44%.