Despite a deluge of bad publicity in recent months, San Francisco ridesharing company Uber Technologies Inc. has decided to put down deeper stakes in Silicon Beach.
The controversial company last week signed a 10-year lease in Santa Monica for about 40,000 square feet at 1733 Ocean Ave., according to Westside real estate sources. Terms of the deal were not disclosed, but Cushman & Wakefield Inc., the real estate firm that handles leasing for landlord Maguire Investments Inc., was reportedly marketing the space for $6 a square foot a month. At that rate, Uber’s long-term lease would be valued at about $28.8 million.
The company, co-founded by L.A. entrepreneur Travis Kalanick, already took about 12,500 square feet at 1437 Seventh St. in Santa Monica. It was unclear whether Uber plans to move out of the smaller office or keep both. Luke Palmo, an executive vice president at Coldwell Banker Commercial Westmac who handles leasing at 1437 Seventh, said Uber executives have not contacted him to give notice.
Either way, it will take some time to build out the raw office space Uber leased on Ocean. The company is expected to move into the space in the spring.
The 40,000-square-foot lease – a sizable deal in the tight tech market – was the second in two weeks in downtown Santa Monica. Earlier this month, co-working office space company WeWork signed a 10-year lease for about the same size at 520 Broadway.
Uber completed its new Santa Monica lease just shortly before district attorneys in Los Angeles and San Francisco filed a consumer protection lawsuit against the app-based ridesharing service. The suit accuses Uber of fraud for charging riders airport pickup and safe-ride fees when the company allegedly does not do thorough background checks and neither the company nor its drivers pay airport tolls. The company, criticized worldwide for having lax safety and insurance standards, has been banned in Spain, Thailand and India.
Uber representatives did not return requests for comment.
Ace Offer
Less than a year after opening its doors, the Ace Hotel Los Angeles in downtown L.A.’s Broadway Theater District is on the market.
The 182-room hotel at 929 S. Broadway opened in January and quickly became a popular hipster hangout. Chicago landlord Greenfield Partners is said to be seeking $550,000 per guest room, or approximately $100 million, for the property.
The hotel is being marketed by John Strauss, James Stockdale, Corey Hamabata and Harrison Ishida of Jones Lang LaSalle Inc.’s local hotels and hospitality group.
Built in 1927 as an ornate private theater for United Artists’ co-founders Charlie Chaplin, Douglas Fairbanks Jr., D.W. Griffith and Mary Pickford, the building now features 182 guest rooms, including 16 suites, a 1,600-seat theater with a 2,300-square-foot grand lobby and approximately 1,600 square feet of meeting space. Four restaurants including a rooftop bar and lounge also operate at the building.
A marketing brochure touting the property’s attributes lists a series of “value enhancement opportunities” for prospective buyers, including leveraging the building’s theater as a premier event venue as well as enhancing food and beverage operations.
In the package, JLL brokers also noted that buyers could keep the Ace Hotel brand and management team on as contracted, or pay a fee to ditch it.
“Ace Hotel’s brand, concept and target market are well aligned with the evolving demographics of downtown Los Angeles to capture demand from the growing segment of millennial travelers and the creative/fashion industry base,” the brochure read. “Alternatively, new ownership can acquire the hotel unencumbered by brand and management, subject to a termination fee.”
Retail Downtown
Downtown L.A. developer Ratkovich Co. last week announced that two retail tenants have signed leases for the Bloc, a mixed-use redevelopment of the mall at 700 S. Flower St., and a third committed to staying put.
San Francisco men’s retailer Wingtip, which sells clothing, leather goods, cigars, single malt Scotches, fly-fishing gear and bar ware, leased about 22,000 square feet. The space includes a members-only social club Wingtip plans to operate on the upper levels of the project’s 33-story office tower. The club, which will be open to both men and women, is expected to feature a private bar, space for themed events, meeting rooms, wine storage and smoking rooms.
A second as-yet unnamed retail concept, a gallerylike collaboration between downtown L.A design firms CNTRLgroup and Otto Design Group Inc., has leased 10,000 square feet.
In addition, Macy’s Inc. committed to keep 250,000 square feet in the Bloc project, which the company said it will upgrade to a flagship store.
Lease terms for each retailer were not disclosed.
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
