Shared-Office Firm Finds Space in Santa Monica

0

WeWork, a company that rents shared office space to fledgling entrepreneurs, has signed a 10-year lease for a little more than 40,000 square feet at 520 Broadway in Santa Monica

Westside real estate sources said the co-working space operator almost certainly paid more than $5 a square foot a month for the space at the building, also known as Broadway Plaza, a rate that would value the lease at more than $24 million.

WeWork officials did not respond to requests for comment.

The lease is the second WeWork has signed for space in Los Angeles in as many months. In November, the company agreed to rent 44,500 square feet in downtown for 15 years in the historic Fine Arts Building, a 1920s office tower at 811 W. Seventh St. There, the company was reported to be paying about $2.83 a square foot a month.

New York-based WeWork first entered the L.A. market in 2011 when it leased space at 7083 Hollywood Blvd. in Hollywood.

The company will lease the second and third floors in the six-story Broadway building, making it by far the largest tenant there. It will join Microsoft Corp., which occupies the entire top floor, and Zodiac Media, which occupies the fifth floor. The building is now more than 90 percent occupied, a significant improvement since New York landlord Vornado Realty Trust bought it in 2012 for $61 million. At the time, the building was only 69 percent full, according to real estate data provider CoStar Group Inc.

Now that the building is almost entirely leased, Vornado has hired real estate firms Eastdil Secured and Cushman & Wakefield to market the property for sale. Sources estimate the 113,000-square-foot Class A building will sell for between $90 million and $100 million.

Representatives of Eastdil and Cushman declined to comment.

Movable Freight

OTX Logistics Inc., an international freight-forwarder based in Hong Kong with U.S. headquarters in Los Angeles, has signed a lease to move inland from the South Bay to consolidate and expand its warehouse footprint by more than 360 percent.

The publicly traded company last month signed a six-year lease for nearly 187,000 square feet at 16012-16030 Arthur St. in Cerritos. It will move in January from a pair of small warehouses on Figueroa Street south of the 105 freeway, where it takes about 40,000 square feet.

The Cerritos building is owned by New York’s Blackstone Group and IndCor Properties Inc. of Chicago. They agreed to give OTX seven months of free rent on top of its six-year term. Rent for the 37-year-old Class B industrial building was negotiated to 43 cents a square foot a month, which values the logistics company’s lease at nearly $5.8 million.

Cameron Driscoll, a broker for Jones Lang LaSalle Inc. who along with Luke McDaniel and Zac Sakowski represented the landlord in the deal, said the tenant was attracted by the possibility for near-term expansion in the 290,000-square-foot building. OTX needed the extra space this move will allow after landing a big new account with a consumer goods company.

“OTX isn’t leasing the adjacent 100,000 square feet yet, but they’re kind of hoping no one takes it, because they’re anticipating taking it in the next six months or so,” Driscoll said. “In the logistics business, that kind of thing is common, because finding the right size building can be difficult. They don’t want too much space, which would kill their profitability, but they want enough space to have the freedom to go out and get another account.”

David Bales, a principal at Lee & Associates, represented the tenant in the deal.

Moving Matters

Laramar Group, a multifamily real estate investment and management company based in Chicago, has named Scott Anderson a vice president in its L.A. office. Anderson joined Laramar from TIAA-CREF Global Real Estate, where he was a senior director who oversaw multifamily asset management. Anderson will oversee Laramar’s California properties. … Polaris Pacific, a real estate sales, marketing and research firm in San Francisco, has named Emily Norton a project director in its L.A. office. Norton will oversee properties in downtown Los Angeles and Glendale, as well as others in the works for Polaris Pacific in greater Los Angeles and Orange County. … Cushman & Wakefield of California Inc.’s Global Portfolio Solutions Group, made up of John Minervini, Erik Larson, Robin Dodson and Chris Tolles, represented True Religion Apparel Inc. in a lease deal reported last month. They worked in collaboration with John Doyle and Michael DeSantis, also of Cushman & Wakefield, to negotiate the apparel company’s move from Vernon to Manhattan Beach.

Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.

No posts to display