Pabst Brewing Co. caters to its hip young customers’ taste for low-cost beer, so it makes sense that when the company moved to Los Angeles it got a good deal on its lease.
A five-year lease for the company’s L.A. corporate headquarters was finalized in early October with an estimated value of $1.3 million – about $450,000 less than the going rate, industry sources said. The company announced earlier this year that it would be moving its corporate headquarters from the Chicago area to Los Angeles.
“This is a big deal for California, and for Los Angeles in particular, because it’s been really rare to see a corporate headquarters come to Los Angeles when so many companies have left over the last couple of years,” said Jones Lang LaSalle Inc. managing director John Ghiselli, who represented Pabst with Jen Frisk in the deal. “These guys are really going against the trend.”
High-profile departures of corporate headquarters include Northrop Grumman Corp., which left early this year, and Nissan North America, which left in 2005.
The decades-old brewing company leased 8,101 square feet of office space at Atria West, a two-building, 192,000-square-foot complex on Santa Monica Boulevard just west of Century City near Westwood.
“It’s a good location for their business,” Ghiselli said. “They found a high-quality building within a creative environment with an attractive rental rate. It’s also in close proximity to people they’re going to be working with to really grow this brand that’s been around for generations.”
He declined to comment on the value of the lease, but said Pabst got “a great rate for a great building.”
The average rent for Class A office space in the submarket is $3.62 per square foot, and at that rate the five-year lease would’ve totaled about $1.75 million.
Sales for the brewing company’s flagship product, Pabst Blue Ribbon Beer, have been climbing for the past few years after decades of decline. The beer, based on its historic appeal to blue-collar workers, has developed a reputation as a low-price brew favored by young drinkers turned off by the excessive hype of competitors.
The company’s new headquarters is in an area that’s home to many entertainment-related companies that could contribute to Pabst’s marketing. Tenants in the building include Black Entertainment Television LLC and Warner/Chappell Music Inc.
The space has an outdoor balcony and entertainment area, which Ghiselli said he thinks Pabst will likely use to host marketing events.
“But generally speaking, it is truly their corporate administrative space,” he said.
The arrival of a corporate headquarters in Los Angeles is significant because of the benefits that big employers can bring.
“Having corporate headquarters in Los Angeles is very important to our civic life because companies headquartered in a city tend to be much more involved in community affairs, and in philanthropy and charitable causes,” said Steve Sann, chairman of both the Westwood Community Council and the Westwood Village Business Association.
Billionaire C. Dean Metropoulos bought Pabst in May 2010 for about $250 million. His sons, Evan and Daren, are running the company, which includes other brands, some defunct, in addition to the Pabst Blue Ribbon line.
Until the move, the company was based in Woodridge, Ill., and had 200 employees.
Pabst executives began their transition from the Chicago area to Los Angeles this summer and have been working out of the Atria West building for several months already.
“They already have lots of people on the ground in Los Angeles doing their business,” Ghiselli said.
Company officials declined to answer questions about its move and how many people would be working at the office. Though according to previous articles, Evan Metropoulos spends his time in New York, Miami and Los Angeles, and Daren Metropoulos lives on an L.A. estate that once belonged to Hugh Hefner. The company will keep offices in Milwaukee and San Antonio.
The company provided a statement from Daren Metropoulos via e-mail.
“We’re thrilled to once again have a home for Pabst and our other iconic brands here in Los Angeles,” the statement said. “We are excited to now have a strong presence in the entertainment capital of the world.”
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