Playa Vista, which has been growing in popularity with the boom of Silicon Beach companies, may be about to net one of L.A.’s largest tech firms.
After outgrowing its Santa Monica headquarters, video game maker Riot Games Inc. is close to signing a deal that would be the largest lease in the market in five years.
The company is negotiating for between 250,000 and 300,000 square feet at Dallas developer Lincoln Property Co.’s Latitude 34 project, at 12130 and 12180 Millennium, sources told the Business Journal. It would be the first tenant in the buildings, which were built in 2010 and together comprise about 300,000 square feet.
Details of the terms being discussed are not known. However, rental rates in Playa Vista are typically about $2 less than those in Santa Monica, which were $4.72 a square foot in the first quarter this year, according to Jones Lang LaSalle Inc.
So at about $2.70 per square foot per month, the deal would be worth about $9 million annually.
Both Riot Games and Lincoln Property declined to comment.
If consummated, the deal would be the largest tech lease in the Playa Vista area since 2008, when Fox Interactive Media signed a lease for roughly 420,000 square feet at another Lincoln Property complex. Fox never actually moved in, leaving the space mostly vacant since.
Playa Vista, which began as a planned community in the 1970s, has seen its commercial space sit more than half vacant for years as Westside communities to its north attracted startups and creative firms.
But as Santa Monica and Venice experienced near record rental and occupancy rates in recent years from a boom in the tech industry, the 1.9 million-square-foot Playa Vista market has come to life. Developers such as Ratkovich Co. and Lincoln have renovated or built ample amounts of creative office space – it’s now the only Westside market that can offer creative office space of 100,000 square feet or more.
Software company Microsoft Inc., ad-tech company Rubicon Project and celebrity gossip outlet TMZ have recently agreed to move to Playa Vista. They follow a wave of tech and media tenants that began signing deals in the area two years ago, such as YouTube LLC and Earthbound Media Group. None have taken more than 70,000 square feet.
Arty Maharajh, vice president of research in the downtown office of Cassidy Turley Inc., said the strength of the company and the sheer size of its pending lease in the submarket could serve as a catalyst.