DreamWorks Animation’s location in Glendale, California has sold once again and this time for $30 million more than what it was going to five months prior.
Griffin Capital Essential Asset REIT bought the Tuscany-style, 15-acre property from SunTrust Banks Inc. for $215 million, where it was originally sold to the SunTrust for $185 million in February.
Why the switch of hands again? And how does DreamWorks benefits from the sale if they already sold it to an investment arm of SunTrust?
It is reported by the L.A. Times that DreamWorks sold the property in February as a “cost-cutting measure” after a handful of feature films they released did not do as well as they predicted at the box office.
But as a part of the original deal made in February with SunTrust, DreamWorks got a profit-sharing agreement for a future sale of the property, which is what SunTrust planned on doing when they purchased the site. Along with that agreement, Variety reported that DreamWorks will still remain a tenant on a 20-year lease with yearly rent starting at $13.2 million and an annual increase of 1.5 percent each year.
Griffin Capital Essential Asset REIT’s President Michael Escalante told the L.A. Times that the transaction was perfect for the El Segundo company, where they like to purchase properties in nice areas that are then leased to a single tenant.
DreamWorks Animation’s headquarters in Glendale, California.
With this transaction, many people perceived it as a prediction of a downturn for DreamWorks Animation, but the forward movement of the new Shanghai location can tell us otherwise.
Since 2012, DreamWorks has been partnering with a handful of Chinese businesses to jumpstart its joint venture — Oriental DreamWorks, which will be headquartered in Shanghai.
The property will be a waterfront complex in Shanghai’s historic Bund district in an attempt of developing a cultural industries. The tower will be 13 floors and is joined to a large IMAX cinema center by a pathway that is seen as an extended red carpet. It will be in the center of a $2.4 billion development — designed for entertainment, culture, office and retail space — called Shanghai DreamCenter.
The project is a joint venture of DreamWorks Animation, Hong Kong-based developer Lan Kwai Fong Group and private equity firm China Media Capital. The major funding will be from China Development Bank Capital. The groundbreaking for the headquarters happened this May and is slated to open in late 2017.
Sources:
http://www.latimes.com/business/realestate/commercial/la-fi-dreamworks-office-sale-20150723-story.html
http://variety.com/2015/film/news/dreamworks-animation-campus-sold-again-1201547132/
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-oriental-dreamworks-shanghai-20150608-story.html
