Hudson Pacific Unloads Two LA Offices, Including ZipRecruiter’s HQ
The Santa Monica properties result in a $22 million gain, HPP said
By Greg Cornfield August 28, 2023 11:05 am
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Los Angeles-based developer and real estate investment trust Hudson Pacific Properties (HPP) has unloaded a couple more offices from its portfolio.
The studio and office landlord sold 604 Arizona Avenue — the headquarters for job search engine ZipRecruiter — and 3401 Exposition Boulevard. Both assets are in Santa Monica, and sold for a combined $72.5 million.
The two deals result in a $22 million gain, HPP said. The announcement didn’t delineate specific sales prices for either asset, nor did the firm disclose buyer names. HPP representatives did not immediately respond to a request for comment.
According to property records, the REIT acquired 604 Arizona for $21.5 million in 2011 and 3401 Exposition for $24.7 million in May 2013.
Deluxe Entertainment’s subsidiaries — post-production firm Company 3 and visual effects company Method Studios — are nearing the end of a 12-year lease signed in 2013 at 3401 Exposition, according to reports from the time.
HPP is dealing with virtually empty soundstages amid the writers and actors strikes, as well as declining demand for office space — particularly when it comes to the media and tech tenants that HPP caters to. Earlier this year, Moody’s Analytics downgraded HPP’s credit rating due to the strikes and low office leasing activity.
After the second quarter, HPP reported its office portfolio occupancy dropped slightly again to 85.2 percent. The portfolio was 86.9 percent occupied in the first quarter, and 94.8 percent in the first quarter of 2020 before the pandemic.
“Regarding our office portfolio, a greater percentage of our tenants are starting to enforce back-to-office requirements, which we believe could ultimately result in the need for more office space as workforces have grown on a net basis over the past five years in many industries central to our leasing efforts,” CEO Victor Coleman said in a statement with the firm’s second-quarter earnings report.
Earlier this year, HPP sold the Skyway Landing office in Redwood Shores, Calif., for $102 million, and, in October 2022, the firm sold a 12-story, 205,522-square-foot office on Hollywood Boulevard for $96 million. However, HPP also wants to build a large redevelopment on city-owned property in Baldwin Hills that will feature 300,000 square feet of office space, among other uses.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
