In a 2010 deposition in WME Entertainmentâs legal dispute over a Beverly Hills building it refused to accept in the Endeavor-William Morris merger, Emanuel used the Yiddishism to describe his thoughts upon hearing of the tens of millions of dollars his agency was paying for a long-term lease for its current headquarters at 9601 Wilshire Blvd.
The commercial real estate business is recovering from a bust, and many sectors of the entertainment business are trimming costs and seeking new revenue streams, but among the top talent agencies, hefty investments in their headquarters are regarded as necessary to foster teamwork among staffers and, of course, to impress clients â even if opulant digs seem out of whack with the economic realities of the industry.
Rather, the blueprint for these temples to talent seems to include sleek work spaces, specially made areas for art collections, large theaters and meeting spots and, in the case of CAA, an entrance and lobby area that have the feel of entering a separate universe encased in Carrara marble.
(UTA 9336 Civic Center Drive, Beverly Hills – Move In: 2012 – Size: 130,000 square feet – Architect: Rottet Studio.)UTA left the Wilshire corridor last year for the former headquarters of Hilton Hotels, a 120,000-square-foot complex that underwent an extensive and expensive renovation to meet the agencyâs specifications (in real estate circles, the rumor is that the build-out cost $30 million, and the landlord had reportedly been asking $4 per square foot per month in rent). Included was a reconfiguration of the space, cutting through five floors to create a floating central stairway that greets visitors from the valet and reception area.
There is more to come: Recently, the agency has been building out another 10,000 square-feet of space for expansion. In turn, UTA is no longer located in an office tower, but rather is ensconced in the newly named UTA Plaza, a sprawling campus-like setting near the Beverly Hills Post Office area that makes a statement about the agencyâs stature relative to rivals.
âThere has been a movement among all the talent agency groups to have a branding and identity to their premises,â says Joel Frank, senior VP at global real estate services firm CBRE in Los Angeles, noting that the trend also has extended to midsized agencies like APA, which has its own building in Beverly Hills. The cost of building spaces for agents is âmuch higherâ than for other professionals, like lawyers, that want to appear to be on the cutting edge.
âThe agency business is still about glitz and glam and bling, and there is a âwowâ factor that the agency wants to have as distinguished clients arrive for meetings,â Frank notes.
Jay Luchs, exec VP of commercial real estate advisor Newmark Grubb Knight Frank, echoes the sentiment. âIf youâre known as the best in the business, you want to be visible,â he says. âThe office is a powerful statement. Visitors come in and out all day.â Thatâs why agencies invest so much in their lobby. It is by design that a visitor waiting in CAAâs sprawling, glass-and-marble space is likely to see the bustle in the floors above.
(WME paid a settlement of more than $25 million after reversing a plan to relocate to this building on North Beverly Drive.)Although most rents are not disclosed, itâs not too much of a leap to figure that the agencies are paying top rate, enduring the boom and bust cycles of commercial real estate. According to brokers, the average monthly rates for top-of-the-line space in Beverly Hills and Century City are running about $4 to $5 per square foot, down slightly from a peak of $5 to $6 or even $7 (for the very top âtrophy spaceâ) at the height of the market.
Talent agencies have a history of going over the top when it comes to expensive digs. Almost 75 years ago, Jules Stein enlisted architect Paul Williams to design the English Georgian revival headquarters of MCA, space that still greets drivers heading into Beverly Hills from Burton Way (and is now the home of Paradigm and Platinum Equity). The 360 N. Crescent Drive complex, at 124,000 square-feet, featured sweeping staircases, gardens and statuary, evoking many of the homes Williams designed for MCAâs clients.