After years of rumors, Boston Properties broke into the Los Angeles office market in 2016 when it acquired Blackstone Group’s stake in Santa Monica’s Colorado Center for $511 million.
The other owner of the 1.2 million-square-foot office complex, TIAA, retained its 50 percent stake in the property. The six-building campus was refinanced in 2017 with a $550 million CMBS loan provided by Morgan Stanley, Deutsche Bank and Wells Fargo.
Documents associated with the securitization provide an inside look at the property’s rent roll.
At the time of the latest refinancing, the Colorado Center was 91.5 percent leased. The top five tenants account for 79 percent of the space and 92 percent of base rent, at an average rate of $63 per square foot.
The top four tenants — streaming service Hulu, car shopping website Edmunds, cancer immunotherapy firm Kite Pharma, and advertising agency RPA — are all headquartered at the complex.
Hulu and RPA have expanded their space somewhat, according to data from Trepp, while the ranking of the top five tenants has remained the same. HBO, whose lease was set to expire in 2019, extended it to the end of this year, according to DBRS Morningstar. HBO is expected to relocate to Culver City after that, and Hulu may take over the vacated space. e-scooter startup Bird also signed a 58,000-square-foot lease at the campus in 2018.
The complex’s 37,000 square feet of retail space is mostly occupied by a 27,000-square-foot TriFit Club & Studios location that pays $22 a foot in base rent, according to DBRS. Daily Grill occupies 7,600 square feet and pays percentage rate only.
Boston Properties’ 2016 acquisition made L.A. the developer’s fifth “core market” after Boston, New York, Washington, D.C., and San Francisco.
Shortly before the company bought into the property, the Colorado Center had seen its occupancy tumble from 85 percent to 50 percent in 2015, with the departure of two large tenants. “League of Legends” developer Riot Games relocated to Element LA, a single-tenant campus in West Los Angeles owned by Hudson Pacific, while Yahoo left the complex as part of a downsizing.
Boston Properties expanded its L.A. footprint further in 2018, when it teamed up with a Canadian pension fund to acquire the ground lease for the 1.2 million-square-foot Santa Monica Business Park from Blackstone for $627.5 million. The developer also built the Salesforce Tower in San Francisco.