Riot Games Acquires L.A. Creative Office in $231M Deal

Riot Games, the video game developer behind the globally popular League of Legends franchise, has acquired its office campus in Los Angeles in a $231 million owner-user deal. Riot paid $150 million to landlord Hudson Pacific Properties for the 284,000-square-foot property on L.A.’s Westside, along with a separate $81 million lease termination fee. 

Hudson Pacific, an L.A.-based real estate investment trust that focuses on Class A office and studio properties up and down the West Coast, will use part of the proceeds to pay down $206 million in commercial mortgage-backed securities debt and reinvest in its current portfolio, particularly outside of Southern California. 

The REIT in 2012 acquired the development — now called Element LA at 12333 West Olympic Boulevard — for $89 million , and subsequently landed a $65 million construction loan to renovate the property. Riot Games signed a full-building lease the following year. Bloomberg first reported news of the property’s latest sale. A representative for Riot did not immediately respond to a request for comment. 

“With the sale of Element LA, we’re realizing the value we’ve created through our successful transformation and full stabilization of this asset,” Victor Coleman, Hudson Pacific CEO and chairman, said in a statement. “This strategic capital recycling further strengthens our balance sheet through additional debt reduction, while enhancing our liquidity to reinvest into growth opportunities within our existing portfolio, especially throughout the Bay Area and Seattle, where we’re seeing the strongest leasing momentum.”

Like many other creative office and studio landlords, Hudson Pacific has hit rough patches in the wake of the pandemic and Hollywood labor strikes. The REIT’s stock price has tumbled 95 percent from its pre-COVID peak, and it had canceled plans to build a sprawling studio campus in the U.K. with Blackstone. It also canceled plans to build a massive office campus on the Westside, and unloaded a large portion of its office portfolio the past few years. 

Still, Hudson Pacific in late March closed a $475 million, five-year CMBS deal tied to six properties in its 2.2 million-square-foot portfolio, including Element LA. The financing allowed the REIT to pay off debt tied to the property, as well as outstanding debt tied to its unsecured revolving credit facility and for “other general corporate purposes.”

Riot meanwhile, a wholly owned subsidiary of China-based tech conglomerate Tencent, has also seen better days. The video game developer announced in early 2024 that it would lay off about 11 percent of its workforce, roughly 530 people, after a period of workforce expansions and toxic workplace allegations, including claims of sexual harassment and discrimination.

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