Universal Music Group is close to leasing another building at the renovated Colorado Campus in Santa Monica, The Real Deal has learned.
The company’s expansion — it will take an additional 33,140 square feet — comes at a time when some smaller media and entertainment firms are pushing into other Westside cities, where greater vacancy allows for more affordable rates. Commercial space in Santa Monica commands higher rents than any other Los Angeles submarket, driven by the city’s strong tech sector and tight supply. Major tech companies including Facebook and Google have offices there.
Lincoln Property Company and Northwood Investors own the 2-acre office development at 2041-2115 Colorado Avenue. The pair recently renovated the campus, tapping RAC Design Build to add a landscaped courtyard and among other amenities.
A source familiar with the deal said the music giant is paying upwards of $6.20 per square foot for the new lease at “Building B,” which was recently completed. That pencils out to roughly $2.3 million per year. Marketing materials advertise lease terms of 10 to 15 years.
The Universal deal would bring the company’s total occupancy at the four-building Colorado Campus to close to 50,000 square feet.
Universal already occupies 18,750 square feet at “Building C,” which is located on Colorado Avenue. Illumination Entertainment, the animation studio behind hits like “Despicable Me,” occupies the remaining two buildings on site.
The campus is located next to Universal’s far larger corporate headquarters at 2220 Colorado Avenue. Universal did not respond to requests for comment. Lincoln Property declined to comment, while Northwood could not be reached.
While Santa Monica is known to command the steepest rents across Los Angeles, Universal’s rate at the complex would exceed the second-quarter average of $5.62 per square foot by more than 10 percent. Increasingly expensive rents have pushed many technology and media companies to look elsewhere, such as Culver City where rents trickle below $4 per square foot.
Earlier this year, HBO pre-leased 241,200 square feet at the sprawling Ivy Station complex in Culver City. The network is joining Apple and Amazon in the area.