The REX Effect: How LBA Realty Closed the Experience Gap at One Culver
How LBA transformed Sony's abandoned headquarters into Silicon Beach's most sustainable creative campus—and proved that sustainability and experience are the same infrastructure
Vision
When LBA Realty acquired Sony's abandoned headquarters in 2014, most investors saw a distressed asset. LBA saw a thesis: Silicon Beach tenants don't lease space; they lease talent infrastructure. Buildings that understand this distinction command different economics.
Amazon, Apple, and HBO were all planning major expansions in Culver City. The creative convergence was inevitable, but the winning strategy wasn't. LBA bet that the next CRE winners would compete on intelligence: systems that learn how tenants work, what drives engagement, and which investments compound. And sustainability wasn't separate from experience; they were the same infrastructure, powered by data.
Market Context
By 2024, Culver City's overall office vacancy hit 28-30%, but Class A creative properties told a different story. Over 500 tech companies anchored Silicon Beach, generating $3.1 billion in quarterly venture funding. Class A asking rents reached $49.32 per square foot, but only for properties delivering measurable experience value.
Tech and entertainment tenants expected consumer-grade digital experiences. They used amenity engagement as a proxy for whether a building "got it." They demanded proof of sustainability, not certifications. The market was asking: which landlords could deliver this systematically?
Closing the Experience Gap
LBA understood what most landlords missed: experience and sustainability create the same data exhaust. AI-optimized HVAC improves both energy efficiency and comfort. Real-time occupancy tracking enables both space optimization and wellness programming. Tenant engagement platforms reveal both amenity ROI and opportunities for carbon reduction.
Most operators treated these as parallel tracks. LBA saw them as one system with two outputs: lower operating costs and higher tenant retention.
Here's how LBA transformed its operations following the REX methodology:
| Spaces & Products | Closed fortress with limited natural light and zero outdoor amenity zones | Gensler-designed campus with 45,000+ square feet (SF) of balconies, 325,000 SF flexible office, 15,000 SF curated retail/restaurants, three sound stages, 32,000 SF Equinox Fitness Club |
| Services | Vacant building with zero tenant programming or wellness offerings | Campus hospitality model, curated F&B partnerships, wellness programming through Equinox, WeWork flexible workspace (60,000 SF), production-ready sound stages; all enabled by HqO's tenant experience platform |
| Systems & Tech | 1986 building systems with manual controls and zero sustainability infrastructure | LEED Gold certified, 100% renewable energy (net-zero Scope 2 emissions), AI-optimized HVAC with real-time metering and fault detection, thermal comfort window tinting, smart building analytics; integrated with HqO to measure engagement and demonstrate ROI |
The Four-Step Process That Made It Work:
- Pilot Before Scaling
LBA tested AI-optimized HVAC at their Irvine headquarters first, measuring energy savings and tenant comfort before deploying at One Culver in 2022. This de-risked the portfolio-wide investment. - Make Every Investment a Business Case
When southwestern exposure caused temperature issues, LBA proved that window tinting could address both comfort and efficiency. When California's Direct Access lottery opened renewable energy procurement, they demonstrated 100% renewable energy could reduce operating costs while achieving net-zero Scope 2 emissions. The results proved the dual sustainability-experience thesis: the window tinting project delivered a 501,000 kWh electricity consumption reduction, 162 kW peak demand reduction, a 10-degree temperature differential, and approximately 15% reduction in tenant comfort complaints. One investment solved both operational costs and tenant experience simultaneously. - Partner for Intelligence at Scale
Physical transformation established potential; LBA partnered with HqO to turn that potential into an operating system that learns and adapts. Rather than managing amenities through disparate systems, One Culver's property team uses HqO to orchestrate the entire campus experience—from Equinox class bookings to curated events, F&B partnerships to building communications—through a single platform. When tenants wanted reasons to gather in the atrium, feedback led to dynamic programming; from happy hours to custom coffees. HqO engagement data revealed what worked, while real-time building performance dashboards transformed sustainability into daily touchpoints. - Create Feedback Loops
The data revealed insights that changed strategy: balcony spaces saw 60% higher usage during production crunch periods, proving they functioned as creative overflow zones, not social amenities. This intelligence informed similar retrofits across LBA's portfolio.
The Experience Payoff
- $500M+ recapitalization with Blackstone in 2022, valuing One Culver at more than triple LBA's 2014 acquisition price
- Tenant retention and occupancy performance in a challenging market: Rising occupancy despite 28% Culver City vacancy, with strong tenant retention following HqO's 2020 deployment proving that data-driven experience management translates to measurable business outcomes
- Rising occupancy despite 28% market vacancy: LBA noted that increased occupancy complicated energy savings quantification, the high-quality problem of success
- Net-zero Scope 2 carbon emissions through 100% renewable energy procurement, positioning One Culver ahead of increasingly stringent California environmental regulations
- Portfolio-wide sustainability framework enabling systematic climate risk assessment across all LBA assets
- Data-driven capital allocation with HqO analytics revealing which investments drive tenant satisfaction and justify future spending
Voices of the Experience
At LBA, ESG strategy is driven by a sensible sustainability approach that mitigates risk, balances cost with return on investment and enhances value across our portfolio.
"One Culver is truly a place for people to gather, collaborate, and innovate."
— Joanna Morrow, General Manager, One Culver
Experience Lessons Learned
- Sustainability is experience infrastructure. 100% renewable energy and AI-optimized systems delivered operational ROI while future-proofing against regulatory shifts. Tenants experienced this as comfort and responsiveness, not just certifications.
- Pilot programs de-risk transformation. Testing AI HVAC at Irvine headquarters before deploying at One Culver demonstrated operational savings before committing portfolio-wide capital.
- Business case discipline creates alignment. Every major investment (renewable energy procurement, window tinting, HVAC optimization) had to pencil out in terms of cost reduction, tenant value, or both.
- Listen-act-measure cycles accelerate improvement. When tenants said they wanted reasons to gather in One Culver's atrium, HqO's feedback tools captured that insight, the team responded with dynamic programming, and engagement data proved which events worked—creating a continuous improvement loop that generic tenant surveys can't match.
- Technology operationalizes vision. Physical transformation established potential; HqO's platform turned it into measurable engagement, data-driven optimization, and scalable intelligence that compounds over time.
Feedback loops create competitive moats. Buildings that learn—capturing how tenants work, what drives retention, where gaps exist—outperform buildings that deploy amenities and hope they work.
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