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If and when Disney pays an estimated $50 billion for the bulk of the assets owned by 21st Century Fox, the studio lot in Los Angeles and other real estate worldwide will remain under the control of the company left behind that will remain under the control of Rupert Murdoch.
“Being able to charge rent on those assets will add to the emerging company’s revenue stream,” Bloomberg reported Wednesday, citing people familiar with the negotiations. Others, though, speculate that some properties, including the Pico Boulevard lot near Los Angeles, could eventually be repurposed, perhaps with office buildings or condominiums.
An announcement of a Fox-Disney deal could come as early as Thursday, say people familiar with the discussions.
As one of the remaining Big Five studio lots in L.A., finding comps for such a unique parcel of land is complicated, but the land alone beneath the Twentieth Century Fox Studio in Century City is likely worth well over $1 billion, according to estimates provided by several commercial brokers. When accounting for the existing square footage on the lot, that figure climbs closer to $1.5 billion, according to estimates.
There are more than 80 permanent buildings on Fox’s lot, including soundstages, television production and programming facilities, executive offices and support facilities. All of which amounts to nearly 1.8 million square feet of building space, much of which is in pristine condition.
Over the past 10 years, the Fox lot has been one of the most active production facilities in the city. ABC’s Modern Family, Speechless and Fresh Off the Boat currently shoot on the Century City lot, as does Fox’s The Orville, The Mick and LA to Vegas, along with all of Ryan Murphy’s FX shows, among others.
Century City, which was originally built on Fox’s backlot after another blockbuster deal was struck in 1956 when studio executives sold off that land to remedy the runaway budget of Cleopatra, is in the midst of a major development boom.
The newly renovated Westfield Mall (part of a $15.8 billion deal struck this week between Westfield and French mall operator Unibail-Rodamco) just reopened to great fanfare. Meanwhile, the $2.5 billion renovation of the Century Plaza Hotel, which will add two 46-story residential towers (290 condos) and convert the hotel into 394 rooms and 63 more condos with 94,000 square feet of retail, is about two-thirds of the way done.
Ironically, the build-out of Century City over the past decade on land formerly owned by Fox would likely hamper any development plans on the Fox lot. A local zoning law that applies specifically to Century City requires that any new development meet a “net zero traffic increase” requirement. That restriction would likely exclude the creation of any new high rises — at least in the short term.
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Portia de Rossi
James Gordon Meek