Tesla Signs Lease Renewal in Santa Monica

While Elon Musk shifts from DOGE mode back to being the head of his electric vehicle manufacturer, the company is extending its stay in Santa Monica, Calif.

Tesla, one of the most valuable companies in the U.S., signed a 82,000-square-foot renewal for its service shop at 1100 Colorado Boulevard. 

The EV-maker first inked a five-year deal valued at $12 million in 2021 with the owner, Culver City-based Thompson Properties. Its fresh lease at the property begins next January. 

Musk made waves when he moved Tesla’s headquarters from Palo Alto to Austin, Texas, in 2021 in the wake of California’s COVID-19 restrictions. And last year, Tesla cut 10 percent of its staff to reduce costs and increase productivity, Musk said at the time.

However, Tesla’s factory in Fremont is still said to be the largest automobile plant in North America. And its presence in the Golden State still commands strong property values: A year and a half ago, Westcore paid $326.8 million for three industrial buildings, two of which were leased to Tesla.

(Also last summer, Musk also moved the headquarters for SpaceX from L.A.’s South Bay to Texas, and also moved X (formerly known as Twitter) from San Francisco to Austin due to his criticisms of West Coast politics.)

Daum Commercial Real Estate’s Michael Collins and David Freitag announced the Santa Monica lease and represented Thompson Properties, while Beta Agency’s Xan Saks represented Tesla. The real estate services firm categorized the lease as industrial. 

“Demand for space increased during this last quarter, resulting in lower vacancy rates,” Collins said in a statement. “With little new supply coming online, the demand imbalance enabled us to negotiate renewals with favorable terms for our clients.”

L.A. County’s industrial market, particularly in West and South L.A., has remained reliable amid uncertain economic conditions and high interest rates — likely due to proximity to the Ports of L.A. and Long Beach, and tight supply. Direct vacancy in West and South L.A.’s industrial landscape dropped to just over 5 percent in the first quarter of this year, according to a recent report by Daum. 

President Donald Trump’s zig-zagging tariff policies are perhaps the largest wrinkle in the problems facing Southern California’s industrial sector, and for vehicle manufacturers like Tesla. The U.S. and China earlier this week agreed to a 90-day pause in tariff escalation for negotiations, lowering their reciprocal duties on goods to 30 percent and 10 percent, respectively. The news boosted stocks on Monday, but Gene Seroka, Port of Los Angeles president, said the truce is unlikely to boost imports in the short term. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.