Leases  ·  Retail

Erewhon Opens at Fully Leased Culver Steps Complex

reprints


When Culver City, Calif.-based Hackman Capital Partners (HCP) acquired the property across from the historic Culver Studios in its hometown in 2017, it was empty.

About five and a half years, nearly $150 million and a pandemic later, the company is announcing the full lease-up of the Culver Steps development in downtown Culver City. Tenants include an Amazon Studios office and a ground-floor retail center anchored by celebrity and influencer-favorite Erewhon, which opened Wednesday.

SEE ALSO: Grantmaker Unbound Moves Across Town to 575 Madison Avenue

The 122,000-square-foot Culver Steps complex also features 10 other retail tenants. Its name comes from the grand staircase that connects an elevated pavilion to a 40,000-square-foot public plaza facing the historic Culver Hotel, which held the office of the city’s founder, Harry Culver, a real estate developer. Culver sold the land for what became Culver Studios more than 100 years ago, and famously said, “All roads lead to Culver City,” when it was incorporated and became an entertainment hub.

Culver Studios has since changed hands several times, and has been run by legendary names such as Cecil B. DeMille, Howard Hughes, Lucille Ball and Desi Arnaz, as well as Sony Pictures. Iconic and well-known productions were filmed there, from “Gone With the Wind” and “Citizen Kane” to “A Few Good Men” and modern hits like “Arrested Development.” HCP acquired the studio property in 2014 and greatly expanded it to include 628,750 square feet of office space and seven soundstages leased to Amazon Studios.

That $620 million redevelopment helped launch Culver Steps. Kennedy Wilson Brokerage’s Lee Shapiro and Christine Deschaine secured the leases with retail tenants for Culver Steps at 9300 Culver Boulevard — including Erewhon, Sephora, Mendocino Farms, Philz Coffee, Pop’s Bagels, Afuri Ramen + Dumpling, Yunomi Handroll, Salt & Straw, CorePower Yoga and Formula Fig — all below 80,000 square feet of additional office space for Amazon Studios.

Financial records show Deutsche Bank provided $56.2 million in financing for the Culver Steps property in October 2017, and Aareal Capital provided $90 million in October 2020.

The brokerage said Culver Steps marks a major milestone for downtown Culver City’s growth and infrastructure, which has been one of the most stable retail, restaurant and office development markets in the region over the past five years. Amazon Studios, Apple, HBO and Warner Media have all found homes in Culver City with significant office lease commitments.

“We’re at the center of the core of downtown Culver City,” Shapiro told Commercial Observer. “The success of the core as a submarket has grown with Ivy Station, at Platform [shopping mall and creative office space], with Apple announcing that it’s purchasing additional land. So we see this as a continuation of growth for the overall downtown form.”

HCP’s Mike Racine said the company modified the project significantly to accommodate one larger shop for Erewhon, instead of dividing it into smaller retail spots. He said Erewhon will be a driver for the community, and that four of the 11 tenants still in various stages of construction will all be open by the end of the year to bring the project together.

Deschaine said “destination retail is the name of the game,” and that Erewhon represents a broader retail trend of specialty grocers that utilize a model that integrates other uses as opposed to operating in standalone buildings.

“We’re seeing more of the larger national grocers downsizing to smaller urban grocery formats to compete with the smaller-sized trend that’s working in Los Angeles, with Trader Joe’s, Sprouts and Erewhon,” she said. “Bristol Farms, Gelson’s — they’re expanding widely through Los Angeles with the smaller format.”

Shapiro said, to HCP’s credit, the firm understood the long game and was patient to curate a tenant base that compliments the larger development.

“The success of this project is a combination of Hackman Capital’s vision for the property, a great location in a desirable market, and experienced commercial agents driving value for our client,” Shapiro added in a statement. “Our team received more than 150 offers for the then-available 42,000 square feet of retail and restaurant space. Operators want very much to be here.”

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.