By Jack EganAnother celebrated studio property has changed hands.The Sunset-Gower Studios in Hollywood was purchased at the end of November for an estimated $100 million by Global Innovation Partners, a real-estate venture fund located in Menlo Park near Silicon Valley. The fund has some remarkably big, powerful and well-known backers.The main investors behind GI Partners, with $526 million in assets, under management, are Calpers, the huge California state employees’ pension fund and CB Richard Ellis, one of the world’s top commercial real estate firms, according to Andrew Tainiter, a GI director who will oversee the new acquisition.Sellers were Saul Pick and Nick Vanoff and their families, operating as Pick-Vanoff Co. The two had leased the former Columbia Pictures studio in 1977 and bought it in 1983 for around $6 million.In recent years the 18-acre property has been a center for television production. It has 13 sound stages; Six Feet Under and American Dream have been among the major shows produced and shot there.Strategically located close to the resurgent Sunset-and-Vine crossroads, the studio started out as the Columbia Pictures lot in the 1920s, and classics like It Happened One Night and From Here to Eternity were filmed there during its heyday.When Columbia (now part of Sony Entertainment) moved to Burbank to share the Warner lot 30 years ago, the studio became shabby and rundown, along with the surrounding neighborhood. Now a bright new shopping complex anchored by Borders Books occupies the northwest corner of the historic intersection. The Arclight Cinema complex is several blocks west.GI Partners bought the Sunset-Gower property as an entrée into the studio business. The property hadn’t been on the market, but the venture capital firm pursued it because its high level of ongoing production activity from existing tenants generates strong cash flow.Also, because “we like the assets under its operating component,” said Tainiter. That’s another way of saying it sits on some extremely valuable real estate.“We fully intend to operate it as a studio going forward,” he added. But he also glowingly noted the improving neighborhood as well as the location of the 18-acre lot “in the heart of Hollywood,” and the burst of development going on around it. Sunset-Gower is one of the last big studio properties still located in Hollywood, along with nearby Paramount.Earlier this year the picturesque Culver Studios, founded by Thomas Ince and once production central for Cecil B. DeMille and David O’Selznick, was sold by Sony Entertainment for approximately $125 million to Studio City Los Angeles, a partnership made up of Lehman Brothers, Pacific Coast Capital Partners and Pacifica Ventures. (Many of the same partners, operating as Studio City New York, have been trying to build a $375 million studio complex in midtown Manhattan but haven’t obtained enough tenant commitments to go ahead.)Tainiter, 35, will keep an office at Sunset-Gower, functioning as the studios’ executive director along with Eric Harrison, another partner at GI. Steve Auer will continue to be responsible for daily operations on the lot as general manager.GI Partners’ only other major property in Southern California is the Carrier Center Los Angeles, a downtown data “hotel” for state-of-the-art telecommunications companies to network their systems. But Tainiter says GI Partners is interested in pursuing “other properties in the entertainment business.”
Written by Jack Egan
