940 N. HIGHLAND AVE HOLLYWOOD, CA 90038

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1 FOR SALE 940 N. HIGHLAND AVE HOLLYWOOD, CA OWNER USER OR INVESTOR OPPORTUNITY MAJOR PRICE REDUCTION $8,299,000 ART DECO GEM / A PIECE OF HOLLYWOOD HISTORY FOR MORE INFORMATION PLEASE CONTACT: Marty Barkan, CCIM, CRE First Vice President Lic marty.barkan@cbre.com OFFERING MEMORANDUM

2 EXECUTIVE SUMMARY THE OFFERING CBRE, Inc., as exclusive advisor is pleased to present the unique opportunity to acquire 940 N. HIGHLAND AVENUE, Hollywood, CA ( The Property ). The Property consists of a charming art decco building which has been highly improved as a state of the art entertainment industry complex while maintaining its Old Hollywood charm. 940 N. Highland includes approximately 12,760 SF of office, production and postproduction space located within the 2-story building, along with securely gated outdoor parking currently striped for 32 vehicles. The Property is ideally located in the heart of Hollywood on the east side of N. Highland Avenue between Willoughby Avenue and Romaine Street. As with all the industry centric areas of Hollywood, this section of Highland Avenue is enjoying its own renaissance with trendy art galleries, restaurants, and design oriented establishments joining its longstanding entertainment industry tenant base. The Property is steps away from the newly renovated and repositioned Kodak Campus and in close proximity to other new residential, mixed-use, and entertainment oriented developments such as 924 Seward. As detailed within this offering memorandum, 940 N. Highland includes ample executive offices and administrative staff areas, a state of the art Screening Room which features 2-story height, stadium seating for 12, exceptional sound, and is equipped for exhibition quality final mixing. The technology infrastructure is cutting edge with the latest in fiber optic technologies throughout. The Property is highly secured with Finger Print Recognition Technology at each exterior entry as well as all secured portions of the production areas. The Property includes 4 separate kitchen areas, and natural divisions, allowing a partial owner-occupant to obtain significant income from leasing portions of the building 940 Highland lends itself to both single and multi-tenant occupancy thanks to its Front entry on N. Highland and 3 Separate Entrances along the south side of the building in the parking lot. Rental rates in immediate proximity to The Property are at record highs, positioning 940 N. Highland Avenue as an excellent opportunity for purchase by: Investors, Owner-Users, and Owner-Investor (partial occupancy) alike. OFFERED FOR SALE AT $8,299,000 ($650 PER SF)*APPROXIMATE PER PUBLIC RECORDS CBRE OFFERING MEMORANDUM 2

3 EXECUTIVE SUMMARY PROPERTY HIGHLIGHTS Beautifully appointed and designed for entertainment industry and other creative space users State of the art screening room Post production space Co-working space Multiple kitchens Multiple entrances & readily divisible for multiple tenants BUILDING SPECIFICATIONS BUILDING: LAND AREA: CONSTRUCTION: 2 Story & Creative 12,760 SF (approximate per Public Records) 13,408 SF (0.31 ac) Wood Frame & Stucco YEAR BUILT: 1929 updated 2008 PARKING: ZONING: Surface Lot striped for 32 vehicles LA MR1 APN: , CBRE OFFERING MEMORANDUM 3

4 EXCEPTIONAL CREATIVE ENVIRONMENT Beautifully maintained Art Deco charm Pride of ownership apparent throughout Rare mixture of state of the art technologies, sustainability, & old Hollywood charm Plug & play ready for entertainment technology & media companies, as well as office centric creative companies A must see!

5 LOCATED IN THE HEART OF HOLLYWOOD Potential for rooftop deck offering Panoramic Hollywood views VIEW FROM THE ROOF Private secure parking lot State of the art thumb-print security system throughout Multiple entrances for easy divisibility Sustainable improvements through

6 EXTRAORDINAIRY OPPORTUNITY FOR CREATIVE USERS HIGH END IMPROVEMENTS FOR FILM, TELEVISION, MEDIA COMPANIES

7 STATE OF THE ART SCREENING ROOM Stadium seating for 12 Fully equipped projection booth Build out to top industries standards

8 FLOOR PLANS Electric Entertainment Floor Plan 2nd Floor kitchen restroom Edit Bullpen Edit Edit Sound Editing Stairs Editing Bullpen Editing Bullpen Screening Room Mixing Stage Upstairs Screening Room Projection Booth Screening Rm. Storage Post Sitting Area Kitchen Bath Edit Bay 102 Color Edit Bay 101 Stairs Room Edit Edit Bathroom Edit Stairs Edit Edit Edit Ready Desk Stairs to Roof Stairs to Roof Server Room Phone Edit Ready Edit Ready Kitchen Intern Reception Intern Station VFX Room Bathroom Vault Santos Men's Bathroom Upstairs Kitchen Conference Stairs Conference Room Stairs Women's Bathroom Dean's Bath 1 ST FLOOR 2 ND FLOOR CBRE OFFERING MEMORANDUM 8

9 PLAT MAP / LOCATION MAP APN: , N. HIGHLAND AVE CBRE OFFERING MEMORANDUM 9

10 OWN A PIECE OF HOLLYWOOD HISTORY REPLICA OF 940 N. HIGHLAND FACADE IN DISNEY WORLD

11 MARKET AREA & OVERVIEW

12 MARKET STATS SUBMARKET BASE SF (MIL) DIRECT VACANCY AVG ASKING RATE HOLLYWOOD % $3.60 HOLLYWOOD/WILSHIRE CORRIDOR % $2.39 LA COUNTY % $2.86

13 RECENT SIGNIFICANT ACTIVITY NETFLIX The streaming media leader pre-leases 200,000 SF at Hudson Pacific s ICON at Sunset Bronson Studios development. This lease, believed to be the largest in Hollywood s history, will move their Southern California HQ from Beverly Hills to Hollywood in VIACOM The media giant pre-leases 180,000 SF at Kilroy Realty s Columbia Square development. It will relocate its MTV division from Santa Monica, its BET division from West LA and its Comedy Central division from Hollywood. KTLA The Tribune-owned, local channel 5 renews long-term for 95,000 SF at Hudson Pacific s Sunset Bronson Studios committing to remain in Hollywood over several less expensive alternatives. NEUEHOUSE The New York-based, members-only social and lifestyle club preleases 93,000 SF at Columbia Square for its first West Coast location, demonstrating Hollywood s growing appeal on a national basis. BUZZFEED The new-media company continues to grow and has signed multiple short-term leases totaling in excess of 65,000 SF at various locations to facilitate its rapid expansion while searching for a long-term home in Hollywood. BROAD GREEN PICTURES The new-wave feature film company pre-leases 36,000 SF at JH Snyder s Hollywood 959 development, choosing Hollywood over Beverly Hills, West Hollywood and Downtown LA. VINCE The high-end apparel company leases 28,000 SF at 900 Cahuenga Blvd, significantly increasing their Los Angeles footprint in a relocation from Miracle Mile. CBRE OFFERING MEMORANDUM 13

14 MARKET AREA & OVERVIEW Since the early 20th Century, Hollywood has been and continues to be the entertainment capital of the world. In addition to its multi-tenant office base, Hollywood has a strong core composed of a major motion picture studio, independent studios, television stations, radio stations, film laboratories, record companies, recording studios, post-production facilities, special effects and multi-media companies. These firms serve as the backbone of the Hollywood commercial real estate market. Because of the technical nature of their businesses, many of these firms have made long-term commitments to the area, and have made substantial investments in their equipment and facilities. Due to the fact that the entertainment industry is spread throughout the Los Angeles region and has significant hubs in Santa Monica, Century City, Culver City, West Hollywood, Hollywood and Burbank, Hollywood uniquely provides these firms with a strategic central location to serve other industry firms in the surrounding areas. With the proximity to the major studios in Burbank (ABC/ Disney, DreamWorks and Warner Bros), Universal City (NBCUniversal), Century City (Fox) and Culver City (Sony), Hollywood is the perfect central location for firms that conduct business with these major studios and draw their employees from throughout the Los Angeles region. CBRE OFFERING MEMORANDUM 14

15 THE HOLLYWOOD MARKET The Hollywood multi-tenant office market, which is comprised of over 3.1 million square feet spread throughout 36 office buildings has emerged from the last downturn as one of the hottest markets in California, if not the United States. This is largely attributed to Hollywood s central geographic location and the critical mass of the studios and entertainment industry here. As traditional technology companies attempt to drive evermore viewers to their websites and streaming platforms, they have turned to content creation as a crucial means of accomplishing this. While the submarket was impacted by the recent downturn, vacancies have drastically decreased in the competitive set and rental growth is in full-swing. When juxtaposed with many of the other Los Angeles area submarkets, Hollywood has performed favorably on a relative basis in terms of the percentage increase in vacancy rate and decline in average asking rental rates in downturns, demonstrating Hollywood s resilience and strong underlying fundamentals. Given the relatively small square footage base of the multi-tenant office market, as the overall economy improved, the market tightened rapidly, leaving few large blocks of office space. The Hollywood market has surpassed peak rent levels from the previous cycle as Hollywood s significant supply constraints once again become exposed. In addition to the multi-tenant office market, there are several million square feet of smaller, low-rise, creative office buildings and single-tenant, free-standing buildings that supplement the traditional high-rise office base. Many of these buildings had originally been industrial properties and have been converted to special use entertainment and/or creative office space environments for the entertainment, advertising and technology firms that provide auxiliary services to the entertainment industry. Converting these facilities is often quite costly and these users have invested significant capital into the equipment and physical infrastructure of the buildings in order to meet their needs, demonstrating their long-term commitment to the Hollywood market. CBRE OFFERING MEMORANDUM 15

16 THE HOLLYWOOD RENAISSANCE STORY Hollywood is in the midst of a major revitalization, which includes over $4 billion in public and private developments which include world-class entertainment and tourist venues, the extension of the transportation infrastructure, a large concentration of new residential developments, and the redevelopment of numerous trendy restaurants, hotels, bars and clubs that is transforming the area into a vibrant live, work, play environment. Hollywood has received increased media attention and positive coverage in recent months, emphasizing that the renaissance of Hollywood is happening and it s happening now! Hollywood is home to the largest concentration of film, television, and post-production facilities in the world making it the beating heart of the entertainment industry. Hollywood is located in the heart of Los Angeles County, a worldwide international tourist destination with 42.2 million visitors in 2013, up nearly 2% from the previous record in CBRE OFFERING MEMORANDUM 16

17 AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an Affiliate ) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Property ) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the Owner ), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc., nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

18 FOR MORE INFORMATION PLEASE CONTACT: Marty Barkan, CCIM, CRE CBRE First Vice President Lic N. HIGHLAND AVE HOLLYWOOD, CA CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.