The site of one of Snap Inc.’s new Venice offices is on the market for $20 million, or a sky-high $2,877 a square foot. The listing went out last week, just days before the maker of the Snapchat photo sharing and message app filed its registration for an initial public offering.
The building at 723 Ocean Front Walk, across from the beach, last sold in 2004 for $2.1 million, or $306 a square foot, to the partners of Schonbrun Seplow Harris & Hoffman, a law firm that has offices on site.
Snap recently signed a five-year lease set to begin next month for the building’s 6,952 square feet.
Alicia Shepherd at Marcus & Millichap holds the listing and said the opportunity to own waterfront real estate leased to a major tech company validates the high per-square-foot price.
“If anything on Ocean Front Walk is going to fetch an astronomical asking price, this would be it,” she said. “This is the first piece we’re seeing with a sold tech lease go to the market.”
Shepherd said she expects institutional buyers and foreign investors to take interest in the property and that it would go into escrow in one or two months.
In the filing for its IPO, Snap shed some light on its real estate footprint.
The company said it occupied 591,000 square feet of office space worldwide as of the end of last year, including outposts in Europe, Asia, Australia, and the United States. It owned only 8,500 square feet of that space.
A good chunk of the office space, 305,000 square feet, is in and around Venice, according to the filing. That would include Snap’s headquarters a block from the ocean at 63 Market St., a 6,000-square-foot building that it owns.
Snap’s real estate strategy, to hopscotch across Venice and Santa Monica, has set the company apart from other L.A. tech successes that have chosen to settle in Playa Vista and Santa Monica office parks. Its effect on the local office market could ramp up as Snap adds employees beyond its workforce of 1,860.
“We expect to add additional offices as we increase our head count and expand our business to other continents and countries,” the filing says. “We believe that our facilities are sufficient for our current needs.”
Glendale Gap
Nestle USA had contemplated leaving its Glendale headquarters for years. But the announcement last week that the food giant plans to relocate to Arlington, Va., came as a surprise to city officials and the local real estate industry. (See page 3.)
“This is the most startling news in Glendale since the first offices opened in the 1930s,” said Bill Boyd, a senior managing director at Charles Dunn Co. Inc. who specializes in the Tri-Cities market. “It’s the largest amount of square footage ever vacated at one time.”
When Nestle completes the move to the Washington, D.C., suburbs by the end of next year, it will leave behind 378,450 square feet at 800 N. Brand Blvd., a 21-story tower owned by Piedmont Office Realty Trust Inc.
Although some of that space might be backfilled bit by bit as Nestle moves out, the vacancy is likely to strike a blow for Glendale, which just reached 10 percent office vacancy after sitting at more than 20 percent vacant several years ago.
“This will have an extremely detrimental impact,” Boyd said, adding that Glendale might also lose some cachet in saying goodbye to its largest and most prominent tenant.
Mall Movement
It took nearly a year, but the FIGat7th mall downtown has finally secured a tenant to fill a gaping hole left by Sports Chalet Inc. when it filed for bankruptcy in April.
Nordstrom Inc. will take 27,000 square feet for a Nordstrom Rack. The opening, slated for this fall, will mark Nordstrom’s first outpost in the downtown area, the company said in a statement last week.
Karen McKibbin, Nordstrom Rack’s president, said the discount clothing retailer had long sought space in the area.
“We feel this new location will provide better convenience for our customers who live and work downtown,” she said in a statement.
FIGat7th, owned by Brookfield Property Partners, also has storefronts leased to Target, H&M, and Zara.
InvestCloud Floats In
Fintech platform developer InvestCloud Inc. is moving into West Hollywood’s Pacific Design Center as it looks to expand operations. Its long-term lease spans 28,000 square feet at the Green Building, said the property’s landlord, Cohen Bros. Realty Corp.
InvestCloud, formerly based in Beverly Hills, acquired platform developer Babel Systems Ltd. of London last month for $20 million. It manages more than $1.6 trillion in assets for JPMorgan Chase & Co.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 556-8337. Staff reporter Henry Meier contributed to this report.
