Fresh off its March initial public offering, Snap Inc. is showing more signs that it is growing up and settling down.
The company recently said it planned to focus future growth efforts outside Venice, the neighborhood where Snap occupies 300,000 square feet in a patchwork of small office buildings, many within walking distance of the beach.
The next target appears to be Santa Monica. The company in recent months signed leases for 80,000 square feet at the Santa Monica Airport and 30,000 square feet at the Santa Monica Business Park.
Snap gave a rare glimpse into its real estate strategy in late April, after questions arose about the ownership of a building it partially leases that the iconic Venice Beach Freakshow was forced to vacate.
The former home of the Freakshow, which left the site on April 30, is owned by a limited liability company called Snapshot Partners. A Snap spokesman said the company did not “own or operate” the building, at 909 Ocean Front Walk. He confirmed that Snap occupies part of the third floor through a sublease with architecture firm Jerde Partnership, which is the largest tenant in the building. Jerde said it plans to relocate when the company’s lease ends in a year.
While Snap’s presence often has been blamed for softening Venice’s edgy vibe – and pricing longtime tenants out of the market – it might simply be the most visible sign of tech companies’ growing appetite for hip office space.
Jim Abbott Jr., a director at Realty Advisory Group Inc., said Venice holds a strong allure for office investors, given the scarcity of properties along the coast in Los Angeles. That was likely the case for Snap’s Ocean Front Walk location along the famed boardwalk.
“Someone saw the potential to get a trophy asset with history on Ocean Front Walk,” he said. “Those kinds of opportunities only come around so often.”
If Snap eventually pulls away from Venice, Abbott predicted that other startups will quickly take its place.
“Who doesn’t want to be in the coolest, hippest place in L.A., with an ocean view?” he said. “It inspires creativity in the tech world, and that’s what they’re looking for.”
The Ocean Front Walk building’s potential to add to Snap’s office space was what raised concerns for Freakshow founder Todd Ray when he learned his lease would terminate on April 30.
Ray said he was told his landlord wasn’t connected to Snap, but still felt that the app developer and its employees were twisting Venice’s funky counterculture into a corporate vibe.
“I’m standing there with a two-headed turtle in a container getting sunlight, and they’ll be walking right in front of me, and I’ll say, Look, do you see the two-headed turtle? It’s alive! They won’t even lower their eyes and look into the container to see the two-headed turtle,” Ray said. “Have you Googled so much that you think you’ve seen it all?”
The Freakshow made its home at 909 Ocean Front Walk for 11 years, putting on shows starring “The Bearded Lady, “The Smallest Man in America,” and “Wolf Boy.” Ray said he has not yet found a new site.
The building changed hands in the past year through a string of transactions.
Snapshot Partners is registered to Michael Schlesinger, principal of Cambra Realty in Beverly Hills. It assumed a leasehold interest in the building in March of last year, according to public records. Several sources familiar with the property put the deal’s value at $32 million.
In January, the underlying land – long held by family trusts – sold for $8 million to a separate entity controlled by Schlesinger, called Hancock Orange, according to the grant deed.
Schlesinger did not respond to requests for comment.
