January 16, 2015

Yahoo's Big LA Move

And the deal we've been waiting for is finally done: Yahoo has signed a lease for about 130k SF at one of the sexiest buildings in Playa Vista.

Avison Young principal Randy Starr, who was not involved in the deal, calls the Collective at Playa Vista a "special building," and said the deal likely got done between $3.35/SF and $3.50/SF on a triple-net basis. If you account for the triple-net, the deal isn't really any cheaper than Santa Monica, further proving Playa's role as legitimate competition to SaMo. With Yahoo, Sony, Microsoft and Google investing in Playa Vista, the tide has clearly turned. Bisnow has seen the shift coming. A Yahoo spokesperson tells Bisnow the company has been "working to identify the right office situation" for the firm. The spokesperson says in the fall, teams currently based out of the company's Santa Monica office will transition to the space, and that the company will maintain its presence and space in Burbank.

CohnReznick (Field) MLA

The Collective from Tishman Speyer is a five-building campus that measures about 205k SF and features top-notch amenities, including high ceilings, private gardens and sexy landscaping. One more thing: the building is about a mile from the ocean. Yahoo plans to move into the space, bringing some 400 employees along, in the fall. We called the Collective one of LA's top tech offices.

This comes not long after Google shook the Earth, announcing its plans to shell out $120M for land adjacent to the Hercules Campus off Jefferson, a 28-acre, 530k SF from Ratkovich Co. Randy says there is still room for more action in Playa, and that the deal is equal parts momentum for the community and Yahoo having access to a killer property.

Colliers EVP Nico Vilgiate (pictured at CU Boulder Homecoming with wife Ashley and 4-year-old daughter Mia) tells Bisnow Yahoo flirted with moving to downtown and some landlords seemed convinced they would consolidate operations in the 213. But he says the reality and transformation of Playa Vista is just too much for a company like Yahoo not to tap into. After the big Google deal, Nico thinks the move is a "follow the leader."

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REFM (Valuate) LA
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A Scary Time for Tenants?

As we told you previously, it's a great time to be a landlord in LA. But what does that mean for tenants? Well, one of the speakers at Bisnow's 5th Annual Los Angeles State of the Market Thursday said the numbers are getting paper thin. DTZ regional managing principal Jonathan Larsen (snapped with Brookfield VP John Barganski) says rental rates continue to rise. telling the 500 attendees at the event there is more competition for the good space. Also, Jonathan says the M&A spree of 2014 makes it tough to even follow who owns properties sometimes.

For Brookfield's part, John says 2015 will be a year of long-term commitments from LA Tenants (John must have known about the big Yahoo deal we just told you about). He says all of the focus on the Millennial tech tenants is near-sided, as all major companies are looking for that same smart 24-year-old employee, including law firms and even financial institutions.

Sklar Kirsh founding partner Andrew Kirsh (with wife Courtney and Bisnow's most famous newborn Clementine) expects a lot of movement in the LA market, especially from foreign investors, pushing a lot of SoCal players into more attractive, and accessible, secondary markets.

Avison Young principal Christoper Cooper (with John, Jonathan and Liberty SBF MD Alex Prombaum) says tenants are looking for a much more open layout, which will force some major redevelopment plays in DTLA, where the old-school tower offices still dominate. He says Playa Vista and West LA can only handle so much, creating an opening for DTLA to pull some of those Silicon Beach tenants.

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On this day in 1920, prohibition went into effect in the US. Cheers all! Send news to Elliot Golan, elliot.golan@bisnow.com