Jeff Palmer began building properties for creative and tech tenants during the first dot-com boom in the mid-’90s. Today, the developer said that such companies make up about 80 percent of his portfolio, which includes 16 buildings statewide. In Los Angeles, he leases to movie ticket seller Fandango Inc., video game fan network Machinima Inc. and online shoe retailer Shoedazzle.com Inc. He thinks L.A.’s web-content producers are expanding faster than rivals based elsewhere.
How did you get your start in the business?
I was recruited by Kaufman & Broad real estate from business school.
When did you begin leasing to tech tenants?
We were primarily involved in leasing creative office space in L.A. in the mid-’90s to entertainment, media and advertising tenants. When tech tenants came on the scene during the dot-com boom, they were also very attracted to creative office space and began showing interest in and leasing our space.
What makes them attractive tenants?
They are a major economic force in the current economy. They are also highly appreciative of creative space. A majority of tech tenants are very attracted to the Westside, where most of our properties in Los Angeles are as well.
Are they challenging tenants?
They require extreme flexibility in their lease terms. Most of our tech tenants are startups. If they don’t succeed, they will typically not need the space for more than three years; if they do succeed, they will not need the space for more than three years. So it’s very unusual to have them as tenants for more than three years.
How do you make your building attractive to the firms?
We try to provide flexible lease terms, and prebuilt-out reuseable spaces, so that we can accept lower rents and security deposits. We also feature much more collaborative open space, and extraordinarily creative and attractive architecture. We also can give tenants the ability to scale if they need it, and provide huge knockout kitchens/cafes with the potential for both indoor and outdoor space.
What’s the most unusual request from a tech tenant?
Google bought one of our tenants and wanted us to buy out the other tenants in the building so that they could take over the entire building.
Biggest leasing success?
It was landing the Los Angeles headquarters of HOK Architects. They are fantastic tenants, and a world-famous creative firm.
What other industries do you court?
Advertising, entertainment and media.
What other industries do you see growing?
Los Angeles is seeing an increase in hybrid new-media companies that are producing video content for the web. This is one of the few segments of the digital technology industry where L.A. is leading, and the success of that movement will be a major growth factor for L.A. and especially the Westside.
My colleagues don’t know this about me …
I have been working three years in order to perfect a handstand.
– Jacquelyn Ryan
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- DEVELOPER Lawrence N. Field
- INTERNET---Dot-Com Sublet Space Floods Westside Market
- Real Estate Column---With New Developments, Telecom Space Could Double
- Offices Go Industrial Chic
- OVERVIEW - Driven by High-Tech Firms, Market Hitting Hyper-Drive
- WILSHIRE---Struggling Tech Firms Turn To Area to Save on Leases
- LIQUIDATON---What Ever Happened to All That Cool Dot-Stuff?
- Creative Tech Firm Pulls Plug on Santa Monica