YouTube Buys San Bruno Office Campus for $215M

Los Angeles-based Hudson Pacific Properties announced that it has sold the Bayhill Office Center in San Bruno, California to online video giant YouTube in an all-cash, off-market transaction worth $215.0 million, or about $388 per square foot. The 554,328-square-foot Class A office campus is adjacent to YouTube's existing headquarters in San Bruno; the company has yet not announced its plans for the new space, but has been tweaking its business strategy. Hudson Pacific originally acquired the complex as part of the San Francisco Peninsula and Silicon Valley portfolio purchased in April 2015 from Blackstone Group LP.

"Our sale of Bayhill Office Center highlights continued strong demand from the world's leading technology companies for high-quality office space along the Peninsula," said Victor Coleman, Chairman and CEO of Hudson Pacific Properties in a press release. "The asset was non-core to our portfolio, and we sold it at a premium to our original purchase price allocation as part of the Blackstone portfolio acquisition."

"This deal indicates the belief that digital media and new digital content, as opposed to movie and TV studio content, is where entertainment and information is heading," said Chris Shipley, a Redwood City-based independent analyst and consultant for the innovation and media sectors.

Bayhill Office Center is currently full and existing tenants include Oracle, Walmart Labs and other, smaller companies. It is unclear if prices will go up for tenants, or whether YouTube, a unit of Alphabet Inc., wants a good portion of the space for themselves. For more news and information visit Blumberg Partners.

Hudson Pacific Sells Burlingame Office Complex for $90M

Los Angeles based Hudson Pacific Properties announced this week that it had sold the Bay Park Plaza office complex outside of San Francisco in Burlingame, California to H&Q Asia Pacific for $90 million in an all-cash transaction. H&Q Asia Pacific is an Asian private equity firm founded in 1986 by Ta-lin Hsu as a branch of the investment bank Hambrecht & Quist. Eastdil Secured represented Hudson Pacific and Alain Pinel Realtors represented H&Q Asia Pacific in the transaction.

The property was part of the larger San Francisco Peninsula and Silicon Valley portfolio, which Hudson Pacific had acquired from Blackstone Real Estate Partners V and VI, in a stock-and-cash deal worth $3.5 billion, in the first half of 2015, according to a Zachs report. Hudson Pacific said that it's using proceeds from the transaction to pay-down a portion of its $550 million two-year term facility.

"By selling Bay Park Plaza, we're disposing of a non-strategic asset at a premium to our original purchase price allocation as part of the Blackstone portfolio," said Victor Coleman, Chairman and CEO of Hudson Pacific Properties. "The transaction highlights our ability to generate additional value from these newly acquired properties, and is another sign of the Bay Area economy's strength."

The 260,183-square-foot Bay Park Plaza office property (renamed GIC Burlingame Bay) includes two Class A office buildings at 555 Airport Boulevard and 577 Airport Boulevard in Burlingame on a 13-acrew waterfront site two miles away from the San Francisco International Airport. According to a press release from Hudson Pacific, Virgin America occupies the majority of 555 Airport Boulevard, which serves as its corporate headquarters, though the overall property occupancy rate was not disclosed. H&Q Asia Pacific noted in its press release on the transaction that the property will be a hub for technology companies offering its members and tenants the opportunity to "benefit from the disruptive technology innovation, entrepreneurial experience, and human capital of the Silicon Valley through a platform of advisory services, programs, and commercial and strategic partnership opportunities."

Dr. Ta-lin Hsu said, "I am very pleased to announce the next step in the development of the Global Innovation Center. This project represents the culmination of 30 years of cross-border technology investments by H&QAP and our portfolio of relationships with governments, technology parks, leading technology companies, financial and academic institutions and technology service providers. Our goal is to create a unique ecosystem to foster innovation and provide growing technology companies with access to crucial relationships and value-added services. H&QAP plans to continue exploring opportunities to develop Global Innovation Centers in other technology centers around the world."

For more news and information visit Blumberg Partners.

Hudson Breaks Ground on ICON Tower

Hudson Pacific Properties, the Los Angeles-based real estate company, broke ground this week on its $200 million creative ICON office tower on the 10.6-acre Sunset Bronson Studios lot on Sunset Boulevard in Hollywood. The development will consist of a 14-story, 323,000-square-foot office tower, a six-story, 90,000-square-foot adjacent creative office building, and a 1,600-stall parking structure.

"ICON will be the culmination of our efforts to transform the landmark Sunset Bronson Studios into the country's premier next-generation media and entertainment campus," said Victor Coleman, the Hudson Pacific Properties' Chairman and CEO. "The project affords industry leading companies a unique opportunity to have it all – innovative architecture, sustainable design and immediate access to top-of-the-line sound stages and production facilities at the center of the world's entertainment capital."

"Hollywood is entering a new Golden Age of film production," said Los Angeles Mayor Eric Garcetti, who attended the groundbreaking along with City Councilman Mitch O'Farrell, as well as other business and civic leaders. "Tech, media and production companies will fill the floors of Hudson's ICON office tower and the larger Sunset Bronson expansion and make ICON a microcosm of L.A.'s diverse creative economy. What's better? The project alone will create 520 construction jobs, benefiting Angelenos across our city."

Scheduled for completion in 2016, McCarthy is the general contractor for the vertical campus featuring design by Gensler Architects and state-of-the-art building systems expected to achieve LEED gold certification. Hudson purchased Sunset Bronson in 2008 from the Tribune Co. for $125 million.

For more news and information visit Blumberg Partners.

Hudson Pacific Picks Up California Office Buildings for $3.5B

In another big move for Blackstone this month, it was announced that Hudson Pacific Properties, Inc. will acquire Equity Office Properties' San Francisco Peninsula and Silicon Valley portfolio from Blackstone Real Estate Partners V and VI in a stock and cash transaction valued at $3.5 billion. The transfer brings together two highly complementary office portfolios with a combined asset base of 53 properties totaling approximately 14.6 million square feet across Northern and Southern California and the Pacific Northwest.

The off-market transaction will effectively double Hudson's size and result in Hudson having an equity market capitalization of $3.7 billion and total enterprise value of approximately $6.5 billion. The transaction is subject to customary closing conditions, including Hudson stockholder approval of the proposed equity issuance. Affiliates of Farallon Capital Management, L.L.C., which own approximately 15% of the outstanding common equity on a fully diluted basis, have entered into a voting agreement supporting the transaction.

"The acquisition of the EOP Northern California Portfolio perfectly aligns with our strategy to acquire high-quality office properties in West Coast markets poised for continued growth through off-market transactions. Hudson has long targeted these two Northern California regions for expansion, and while we expect the transaction to be immediately accretive to FFO, we also intend to move quickly to employ our leasing, repositioning and development expertise to extract additional value for our stockholders," said Victor Coleman, Hudson Pacific Properties' Chairman and Chief Executive Officer.

"We chose to take a major stake in Hudson given its high-quality portfolio, outstanding management team and attractive prospects for growth. We believe strongly in the upside potential of the EOP Northern California Portfolio and this combination creates a market-leading West Coast office REIT," said Jonathan Gray, Blackstone's Global Head of Real Estate.

"As long time shareholders, we are excited about Hudson's latest growth opportunity, and are confident that they will continue their excellent track record of execution," added Rocky Fried, Managing Member at Farallon Capital Management.

For more news and information visit Blumberg Capital Partners.

NFL Expands California Office Space

The NFL has signed agreements to extend and expand their lease with Hudson Pacific Properties for the 10900 and 10950 Washington properties in Southern California. NFL Media, currently the major tenant and both locations, will expand its occupancy by over 22,000 square feet effective this July. The agreement extends the company's lease through the middle of July 2017.

"As the owner and operator of premier office and studio properties in California, Hudson Pacific Properties has considerable experience tailoring our property operations to meet the specific needs of media companies such as NFL Media. This extension of our lease with NFL Media exemplifies our strength in operating best-in-class office properties, with a strong media and entertainment tenancy," said Victor Coleman, Chairman and Chief Executive Officer of Hudson Pacific Properties.

The NFL currently occupied office space and two sound stages used exclusively to broadcast the NFL Network, NFL.com and NFL Mobile. Located in one of West Los Angeles' premier entertainment business districts, the 10950 and 10900 Washington properties total 168,943 square feet on 5.5 acres. 10950 Washington consists of an 86,987-square-foot, three-story office building and a 71,886 square foot building containing office space, two sound stages and a café.

For more news and information visit Blumberg Capital Partners.

CIM Group Sells Hollywood HQ to Hudson Pacific

Hudson Pacific Properties announced this month that it had purchased 6922 Hollywood Boulevard in Hollywood, California from CIM Group for $92.5 million, or $450 per square foot. Sean Sullivan of Eastdil Secured negotiated for the seller and Bob Safai with Madison Partners represented the buyer.

"We are excited to add this highly regarded property to our growing portfolio of quality office assets," said Victor J. Coleman, Chairman and Chief Executive Officer of Hudson Pacific Properties, Inc. "This transaction marks our fourth Hollywood property and seventh acquisition in the last twelve months, as we build on the burgeoning presence of the media and entertainment industries in this submarket."

Commonly known as the TV Guide Hollywood Center and headquarters for CIM's corporate operations, the 12-story 205,522-square-foot office building is fully leased to a mix of media and entertainment tenants including Trailer Park, a movie trailer post-production studio and advertising agency, and J2 Global Communications, the owner of the eFax and KeepItSafe brands according to a CoStar report.

For more news and information visit Blumberg Capital Partners.