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Sunday, Sep 25, 2022

Show Biz Publication Raises Curtain on New HQ

Angelenos may soon be talking about the Variety building … in Westwood.

The parent of entertainment news organization Variety Media is close to finalizing a 40,000-square-foot lease at 11175 Santa Monica Blvd., near the 405 freeway. If the deal is made, Variety would leave its Miracle Mile home, where its red letters brand the 31-story building at 5900 Wilshire Blvd.

The company’s new owner, Penske Media Corp., operated by media entrepreneur Jay Penske, has a tentative deal with a company that is in escrow to buy the Westside property from current owner Capital One Financial Corp. The name of the potential buyer was not disclosed.

Along with Variety’s news operations and its bright red building-top sign, Penske wants to move its corporate headquarters and online entertainment news site Deadline Hollywood into four floors of the nine-story, 76,000-square-foot Westwood property. The headquarters and Deadline operations are housed at 9800 S. La Cienega Blvd. near Los Angeles International Airport.

The plan for the new space includes interiors outfitted to include video and photo production studios, green-screen rooms and other amenities.

Neither the lease nor the purchase is expected to close until next month, according to sources familiar with both negotiations.

Reed Elsevier Group, which sold Variety to Penske in October, had signed a six-year lease for the news organization to occupy about 50,000 square feet at 5900 Wilshire in 2008, but quickly put about 14,000 square feet on the sublease market.

The move would be a blow to Miracle Mile landlord Ratkovich Co., but the company is taking it in stride.

Ratkovich released a statement saying, in part, “While we never like to see a tenant leave, we understand this was a business decision on their part. But what this also means is a unique piece of the L.A. skyline will soon be back on the market and we’re eager to find the right company to take its place.”

Brokers for Madison Partners and Travers Realty Corp., which represent Capitol One and Penske Media, respectively, declined to comment.

U.S. Bank Tenant

The Singapore company that has agreed to purchase downtown L.A.’s U.S. Bank Tower will commit millions of dollars to upgrade the building and will open its first U.S. office there as it prepares to buy more American real estate, sources told the Business Journal.

Overseas Union Enterprise Ltd., a publicly traded hotel and property investment company, revealed last week that it is purchasing the 72-story tower at 633 W. Fifth St. and a related parking garage for nearly $368 million from struggling downtown real estate investment trust MPG Office Trust Inc.

This is Overseas Union’s first purchase in the United States. It wants to acquire more office and commercial property across the country.

It’s not yet clear what improvements the company has planned, but sources said it will spend millions to bring the 24-year-old property up to modern office standards. Overseas Union also plans to occupy as much as one full floor, or about 19,000 square feet, in the 1.4 million-square-foot building.

Overseas Union has put down a nonrefundable deposit of $7.5 million toward the purchase, which is expected to close in June.

CBRE Group Inc. represented the buyer. MPG was represented by Eastdil Secured in the sale. Neither returned calls.

Cornerstone Expansion

Cornerstone OnDemand Inc. is expanding its Santa Monica headquarters by 53 percent.

The software company has agreed to take an additional 28,159 square feet at JP Morgan Chase & Co.’s Water Garden complex at 1601 Cloverfield Blvd., according to a filing with the Securities and Exchange Commission.

The expanded lease brings the company up to 81,231 square feet across the top three floors at the property. Monthly rent is about $115,000, with 3 percent annual increases. The total lease expires in 2019.

The company has been rapidly expanding since moving into Water Garden in 2006, growing to 400 employees from about 75.

Cornerstone is in the midst of renovating its existing sixth-floor space, adding a theater, lounge and other amenities. The company is planning substantial renovations to its new fourth floor space, former home to the Girls Gone Wild production company, and will move in by the end of the year.

The landlord is providing $794,000 to assist with interior improvements, said Adam Miller, founder and chief executive.

Staff reporter Jacquelyn Ryan can be reached at jryan@labusinessjournal.com or (323) 549-5225, ext. 228.


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