Playa Vista's remarkable turnaround

Formerly home to the Howard Hughes aerospace factory, the land had been nearly given up for dead, especially the commercial component that was abandoned by DreamWorks SKG back in the mid 1990s. But timing and opportunity can work wonders in real estate and today Playa Vista represents a kind of new frontier for the Westside. As I point out in the May issue of Los Angeles magazine, much of what's happening reflects the growth of L.A.'s hybrid tech sector, a collection of software firms, Web-based designers, special-effects businesses, ad agencies, video game publishers, and entertainment production companies. That and simple economics: It's still cheaper to lease large amounts of space in Plata Vista than, say, Santa Monica or Venice, which remains the preferred location for many young tech companies wanting to be close to the water. From my piece:

"This is a spot where we saw a creative world developing," says Liam Collins, head of YouTube Space L.A., as he leads me on a tour of the 41,000-square-foot production facility that Howard Hughes used as an airplane hangar in the 1940s. Last year's decision by YouTube owner Google to lease space in Playa Vista legitimized the location in a way no developer's sales pitch ever could. Google realized as much in negotiating a sweetheart lease with Wayne Ratkovich, whose real estate firm paid $32.4 million in 2010 for the 11 buildings that at one time were owned by Hughes. "It made us look like heroes, no question," says Ratkovich. Open for six months, the YouTube space serves as a TV incubator for operators of online channels who want to profit from their work. They're given access to sophisticated soundstages, screening rooms, and editing bays that are leagues above the bedrooms and garages where much of their content has been produced. After several weeks of training and consultation, the visiting programmers are replaced with other YouTube talent. "The technology companies want to get closer to creativity, and the creative companies want to get closer to technology," says John Boiler, chief executive of 72andSunny, a rapidly growing advertising agency that's about to move onto the Hughes campus, only steps from YouTube.

[CUT]

Nobody planned it this way, but the merging of technology and media could fit nicely in Playa Vista's semisuburban surroundings as well as in the newly built office complexes directly to the north that are home to Microsoft, Electronic Arts, and other major tech companies. Even so, this nondescript stretch of Jefferson Boulevard remains something of an outpost--not quite Santa Monica and not quite Silicon Valley. As a result, the vacancy rate hovers around 30 percent, compared with 9 percent closer to the coast, and rents are roughly a dollar per square foot cheaper. "Look, it's not Venice, but you pay for Venice," says Matthew Brainard, senior managing director of Studley, a commercial real estate services firm. "And in Venice you're not going to get 40,000, 50,000 square feet of contiguous space with parking. That's the trade-off." David Binswanger is an executive with Lincoln Property Company, one of the developers that purchased land in Playa Vista several years ago. The centerpiece of Lincoln Property's effort is a 225,000-square-foot retail center called the Runway, which will have restaurants, shops, a movie theater, a drug store, and a supermarket--many of the conveniences Playa has been lacking.