Facebook Links Up With More Space in L.A.

0

It’s official: Facebook Inc. is opening its first major office in Los Angeles next month.

The social networking giant signed a 10-year lease for 12,000 square feet at the Tishman Speyer complex in Playa Vista, sources told the Business Journal. Financial terms of the deal were not disclosed.

The four-building, 325,000-square-foot Waterfront Drive complex, completed a few years ago, is about 80 percent occupied. Other tech tenants include USC’s Institute for Creative Technologies.

“We have a growing sales presence in Los Angeles, and we are expanding the office so we can work more closely with advertisers in the region,” a Facebook spokesperson said in an e-mail.

It’s not clear how many employees will be in Playa Vista or whether the office will be used for more than sales and advertising. The company, which has a small L.A. sales office, will move into the new space early next month.

Facebook made nearly $1.9 billion in ad revenue last year, with about $740 million of that coming from large brands such as Coca-Cola. Local advertisers include…

The social networking site, which employs about 2,000 people, is undergoing rapid growth. It is moving its Silicon Valley headquarters this year into a larger 57-acre Menlo Park complex, formerly occupied by SunMicrosystems.

Facebook’s services have been expanding as well. This month, it unveiled a video conferencing function to compete with Google Inc.’s new social networking tool, Google+, which offers video chat rooms.

Broker John Ollen, who internally represented landlord Tishman Speyer, declined to comment.

Market Mover

MPG Office Trust Inc. saw a boost in its stocks last week after selling off another property in Orange County and securing refinancing for its One California Plaza high-rise in downtown Los Angeles.

Downtown’s biggest Class A office landlord saw its shares jump almost 9 percent to close at $3.41 on July 7, one day after the company’s announcements.

MPG unloaded its 2600 Michelson Building in the Irvine Business Complex, relieving it of a $110 million mortgage obligation, while a mortgage loan secured by One California Plaza was refinanced with a lower-interest $160 million facility.

The moves were enough to prompt two analyst upgrades on the stock, which now has two “buy” and three “hold” ratings, according to Bloomberg News.

Wilkes J. Graham, a senior real estate research analyst at Compass Point Research & Trading in Washington, D.C., said the activity indicates the company is making headway in climbing out from under a $600 million-plus debt burden.

MPG has sold off other buildings outside its core downtown holdings and is refinancing other trophy high-rises, including the U.S. Bank Tower, Gas Co. Tower and Wells Fargo Tower. Its remaining biggest challenge is a $400 million loan on the KPMG Tower, which company management called its No. 1 priority in its first quarter conference call.

One possible hiccup: It’s unclear whether MPG can hold on to One California Plaza, owned by a joint venture between MPG and Charter Hall Office REIT, in which MPG holds a 20 percent stake. Charter Hall has put its entire U.S. portfolio on the market including the downtown tower.

The cash flow from such a sale, however, could allow MPG to move forward with capital improvements to make its other downtown buildings more attractive to tenants.

“Any new leasing they get will be an increase to stock price and that may be the best use of cash,” said Graham, who has a “buy” rating on the stock.

Big Sale

In one of the largest multifamily development sales in Los Angeles County this year, a new 163-unit apartment complex in Old Town Monrovia sold for $58.6 million last week.

Cornerstone Real Estate Advisers, a real estate investment company based in Hartford, Conn., bought the Paragon at Old Town Monrovia. The seller was project developer Urban Housing Group, a Palo Alto-based subsidiary of Marcus & Millichap that builds multifamily and mixed-use projects.

The 700 S. Myrtle Ave. property sold for $359,509 per unit, or $376 per square foot – the largest multifamily sale in the San Gabriel Valley and the fifth largest in the county this year, according to the CoStar Group database.

The 160,000-square-foot property opened last year and is 95 percent leased. It has 80 one-bedroom and 83 two-bedroom units that rent from $1,750 to $2,525 per month. The four-story complex has a pool, fitness center and an outdoor fireplace. It also has about 6,000 square feet of retail half occupied by an athletic shoe store.

“This was a rare opportunity for the buyer to acquire a meticulously designed core asset in an affluent San Gabriel Valley community,” said Marcus & Millichap’s Ron Harris, who represented the buyer and the seller.

Greg Harris of Institutional Property Advisors, a Marcus & Millichap division, also represented both parties.

Staff Reporter Jacquelyn Ryan can be reached at [email protected] and (323) 549-5225, ext. 228.

No posts to display