Kilroy Realty is capitalizing on improving office valuations to unload one of Hollywood’s tallest buildings, joining a wave of institutional investors repositioning their portfolios as liquidity returns to commercial real estate markets across Los Angeles and beyond.
The Los Angeles-based real estate investment trust has sold the 22-story Sunset Media Center at 6255 Sunset Boulevard to Barker Pacific Group for $61 million, or $188 per square foot, according to CoStar data. While the deal for the 323,000-square-foot property represents a notable discount from the $76 million Kilroy paid for it in 2012, it signals renewed investor appetite in a market that has been struggling to find its footing.
The transaction marks the second-largest office deal in Hollywood for 2025 and arrives amid broader signs of recovery in Los Angeles, where office transaction volume surged 56% during the third quarter compared to the same period a year earlier. Nationally, office sales have jumped nearly 60% in the 12 months through October as improving borrowing conditions have expanded buyer pools and brought more capital off the sidelines.
For Kilroy, a REIT managing 16.8 million square feet of commercial space, the sale reflects a deliberate strategy to reallocate capital toward properties and markets with stronger near-term fundamentals as liquidity returns to West Coast office markets. That approach was dramatically underscored in September when the company paid $205.3 million to acquire Maple Plaza, the largest office complex in Beverly Hills, where tenant demand has proven more resilient than in other office districts.
Kilroy’s optimistic outlook echoes sentiments among some of the country’s largest landlords, even those with portfolios concentrated in pandemic-battered markets. Executives at fellow Los Angeles REIT Hudson Pacific Properties recently declared that the office market has officially hit an inflection point, with occupancy climbing back to levels not seen in more than a decade and potentially opening the floodgates to blockbuster sales. The firm is now evaluating the sale of some of its office properties for prices “that could be much higher than they were, let’s say, 12 or 18 months ago,” Hudson Chief Executive Officer Victor Coleman said during a November earnings call.
The renewed transaction activity is simultaneously creating opportunities for investors like Barker Pacific to expand their West Coast presence. The Los Angeles-based firm, which owns approximately 4 million square feet across 23 properties, has been aggressively pursuing discounted office buildings over the past year. Its acquisitions have included an Orange County office complex purchased in partnership with Kingsbarn Realty Capital from institutional investor Barings in March.
The Sunset Media Center deal comes as Hollywood grapples with persistent headwinds. The property is currently 60% leased, down sharply from the 86% occupancy rate it commanded at its last sale in 2012. Current tenants include the British Broadcasting Corporation, reality television producer Magical Elves, and the Hollywood Chamber of Commerce. The neighborhood’s vacancy rate has climbed 2.3 percentage points year over year—one of the largest increases in Los Angeles—as office demand has been battered by a contraction in media production alongside lingering concerns around safety and homelessness.
Yet there are tentative signs of stabilization. California recently doubled its annual film and television tax credit program to $750 million, a move that brokers say is helping restore predictability to production pipelines even as cost pressures and content pullbacks continue to reshape tenant behavior. “Hollywood remains closely tied to the health of the entertainment industry, and deals like this underscore continued confidence in media and production as key drivers of the area’s office market recovery,” said Catherine Yeh, CoStar director of market analytics for Los Angeles.
The building itself carries decades of Hollywood history. When it opened in 1973 as the Hollywood Center, the 22-story tower was designed as a modern corporate statement along Sunset Boulevard, offering large floor plates and sweeping views at a time when Hollywood office space was still largely secondary to studio lots. Its subsequent name changes—first to Sunset Media Tower and then Sunset Media Center—tracked Hollywood’s evolution into a broader media hub as television networks, international broadcasters, and production companies sought centralized office space close to studios, talent agencies, and the business infrastructure of entertainment.
The Sunset Media Center sale is the latest in a series of divestitures by Kilroy in Los Angeles and beyond. In July, the REIT sold the roughly 79,000-square-foot office building at 501 Santa Monica Boulevard, a property it had owned since the late 1990s, for $40 million. Around the same time, it was negotiating to shed another Santa Monica property for $41 million. Outside of Los Angeles, Kilroy offloaded a four-building office campus in Silicon Valley to Apple for $365 million, underscoring its systematic approach to portfolio optimization in a market where location and tenant quality increasingly determine property values.
Recent Comments