Boston Properties Inc. has secured a lease expansion and extension at its creative office campus in Santa Monica, Calif., where a major entertainment firm is boosting its headquarters footprint to 351,000 square feet under a seven-year lease.
The newly announced transaction comes after the office REIT landed Roku Inc. as a tenant at the 1.2 million-square-foot, Class A property in April. The San Jose-based streaming platform signed up for a 10-year lease covering 72,000 square feet at the campus, which Boston Properties owns alongside TIAA.
The latest deal with an unnamed tenant, described as a “leading entertainment company,” offers a sign of hope for the Los Angeles office market, which continues to struggle with low leasing activity and soaring availability. Jonathan Lange, SVP Los Angeles Region at Boston Properties, said in a prepared statement that Colorado Center serves as the tenant’s worldwide headquarters.
L.A. Realty Partners, which represents the owners in leasing efforts at Colorado Center, notes on its website that it has leased 300,000 square feet at the property to video streaming service Hulu. Other tenants include Edmunds.com, Rubin Postaer Associates and Kite Pharma, which have leased 195,000 square feet, 186,000 square feet and 160,000 square feet, respectively. The campus is 100 percent leased, according to the commercial real estate firm.
NYSE-listed Boston Properties acquired Blackstone Group’s stake in Colorado Center for $511 million in 2016. TIAA retains a 50 percent stake in the 15-acre campus at 2401-2500 Broadway in Santa Monica’s media and entertainment business district. Built in 1984, the asset features tennis courts, outdoor gathering space, an on-site café and accessibility to downtown Los Angeles via the 26th St./Bergamot light rail station.
Office leasing totaled a mere 2 million square feet across the Los Angeles market in the first quarter of the year, lower than the previous quarter and down 49.1 percent year-over-year, according to a Savills report. Market-wide availability reached 23.6 percent, the highest level since 2009. Available sublease inventory surged by 91 percent since the start of the pandemic to more than 9 million square feet.
Santa Monica has been hit especially hard, with office availability of 30.4 percent at the end of the quarter, Savills reported. Average rent in the submarket was among the highest in Los Angeles at $5.58 per square foot.